ZESA seeks funds to up power generation

 

Windhoek –  Zimbabwe’s ZESA Holdings Ltd, says it will seek to raise US$300 million to purchase new equipment and refurbish Harare, Bulawayo and Munyati power plants to raise combined capacity to around 360 megawatts.

The three power plants have installed capacity of 120 megawatts each, but generation capacity is down to 20 megawatts at Bulawayo plant, 25 megawatts at Munyati and zero at the Harare plant.

“We need money for new boilers at all the plants, we want to change the boiler technology, install ones which are versatile in terms of fuel that is used and make them more efficient,” Josh Chifamba, ZESA Holdings Group Chief Executive, said in an interview in Windhoek.

“About US$300 million is the total costs of the entire project. If a project is doable, money can always be sourced. We are already talking to quite a number of financiers and things appear to be positive,” Chifamba said.

Indian company Jaguar Overseas Investments was awarded the contract to refurbish the Harare plant and “work is expected to start soon”, Chifamba said, but could not say when the financing for Bulawayo and Munyati plants, would have been secured.

Zimbabwe is reeling under debilitating power outages as demand of 2 300 megawatts, far outstrips current generation of around 1 200 megawatts. “We are experiencing pervasive shortages and this is affecting every sector of the economy, the biggest brunt is borne by our domestic customers,” Chifamba said.

Supplies would remain critical until around 2018 when expansion at Kariba South, which add 300 megawatts raising capacity to 1,050, and two units which are being added at Hwange Power Station with additional capacity of 600 megawatts.

“That means an additional 600 megawatts coming on the grid around 2018,” Chifamba said. In the interim efforts would be made to plug the deficit through purchase from regional suppliers, Chifamba said.

“It means we have to continuously look for contracts that will tidy us up in the meantime,” he said.

However, securing supplies from neighbouring utilities in the region is often hampered by an unreliable transmission system. “There is a lot of energy trading that is constrained by congestion or unavailability of transmission paths,” Chifamba said.

ZESA signed an 80 megawatt power purchase agreement with Namibia Power Corp in Windhoek last week. Namibia will start getting the electricity from Kariba South Power Station in April next year, replacing an agreement entered into 2007 when Nampower advanced ZESA a US$40 million loan to refurbish four units at Hwange Power Station, in return for a guaranteed supply of 150 megawatts.

“Due to the uncertainty of power supply from Eskom, the agreement with ZESA have made them our current biggest trading partner with about 25 to 30 percent of our total energy imports now coming from them-this means Nampower is purchasing more energy per year from ZESA during off-peak hours through a combination of buying up to 250 megawatts during off-peak hours and 150 megawatts. This new agreement has positioned Zimbabwe Power Company to be among one of Nampower’s most important and strategic energy trading partners in the region,” Nampower chairperson, Maria Nakale said.

Namibia’s power supply situation will remain precarious until around 2018, when its Kudu gas to power plant is expected to come on stream.

“It is no secret that Namibia’s power demand has long surpassed supply. We rely heavily on imports, which average 60 percent per year and can go up to 80 percent during dry seasons. As such, balancing demand and supply in Namibia, which is not self-sufficient in power supply, is not an easy task,” Isak Katali, Mines and Energy Minister, said.

“This put us as a country in a very difficult situation of being vulnerable in terms of power supply as any negative development in neighbouring states will have a corresponding negative effect on electricity supply in Namibia,” Katali said.a

October 2014
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