Boost for power generation at Kariba


CHINA Export and Import Bank has disbursed US$80 million for generation capacity expansion of Kariba South Power Station to reduce crippling widespread power deficits plaguing the country.

The US$80 million disbursement is the first of several tranches to come under an engineering, procurement contract valued at US$354 million.

Chinese firm Sino Hydro, is undertaking the expansion project estimated to cost about US$533 million, including development costs to be met by the Zimbabwe Power Company.

Kariba South’s capacity expansion is projected to take 40 months and will add 300 megawatts to the plant’s current capacity of 745MW.

This will help to reduce power deficits at a time Zimbabwe can only produce about 1 300MW against peak demand of 2 200MW; with deficits met through imports and load shedding.

“According to the provisions of the contract, the payment schedule of the funds stretches up to 42 months and both parties have so far adhered to the provisions and are amicably pursuing the extension works that are expected to bear fruits within the stipulated timeframes to achieve security of electricity supply,” Zesa spokesman Fullard Gwasira said.

“The funds from China Eximbank have been used for civil works that entail the blasting and drilling of tunnels into the main power house and to date, a stretch of over 100 metres that encompasses the contractor,” Mr Gwasira added.

Zimbabwe needs to shore up power generation to bridge serious demand-supply mismatch at a time the economy is performing well below its potential. 

Power shortage could affect turnaround after a decade of economic recession, which decimated about 50 percent of Zimbabwe’s GDP.

Sources at Sino Hydro confirmed the disbursement of the US$80 million, adding the funding had enabled them to procure key equipment following a ground breaking ceremony in September.

“I can confirm we got about US$80 million advancement payment from China Exim Bank and we used the money to pay the manufacturer for the turbines and generation which allows the process to move at full speed,” said a Sino Hydro source who spoke on condition of anonymity. 

“Work had already started but now that the money has started coming the project is going into full force. 

As Sino Hydro, we are making all these efforts to make sure we deliver on the project so that it is completed on time according to the contract.

“The Bank will be disbursing money according to the interim payment certificate approved by ZPC (Zimbabwe Power Company). So far so good, everything is working well,” the source said.

Sino Hydro also won the tender for the expansion of Hwange Thermal Power Station that will add 600MW to the national grid in what is expected to reduce the crippling power deficit.

ZPC signed a US$1,1 billion EPC contract with Sino Hydro, but the project is estimated to cost $1,4 billion, including development costs, while the project is expected to be completed by 2017.

The Sino Hydro source said potential funders of the Hwange project were expected to visit Zimbabwe for due diligence next month. “If they are satisfied we will start the evaluation procedure.

President Mugabe went to China on a State visit in August where a number of infrastructural development projects deals were sealed in his presence, including Kariba South expansion. – The Herald

November 2014
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