Sakunda clinches 200MW power deal

Sakunda clinches 200MW power deal

Sakunda Holdings founder Kuda Tagwirei

GOVERNMENT has awarded local energy group, Sakunda Holdings, the multi-million dollar tender for a 200 megawatts emergency diesel power plant to be established at Dema substation in Seke communal lands, the Financial Gazette has learnt.
Earlier reports had indicated that three foreign companied had been short-listed for the tender, which is meant to alleviate the nation’s power crisis.
But sources confirmed that the tender had been given to Sakunda. The Financial Gazette saw a copy of a letter written to Sakunda confirming that the company had been contracted to start the emergency power project, to “be expedited to avert critical power shortage”.
The company is understood to have been given up to next month to ensure that the plant starts feeding into the national electricity grid to alleviate power shortages in the country.
Permanent secretary in the Ministry of Energy and Power Development, Patson Mbiriri, confirmed the allocation of the tender to Sakunda in a letter to the country’s power utility dated December 24, 2015.
In the letter, seen by this newspaper, Mbiriri said: “The contract for the installation of the plant and supply power has been awarded to Sakunda Holdings.
“The government is cognisant of the urgent need to secure 200MW power to cover the gap which is going to be created by the reduction of power generation at Kariba Power Station as of January 1 2016. Nonetheless, the supply from the diesel plant should not cause material negative impacts to the economy.”
Sakunda sold a controlling interest in Sakunda Energy, a petroleum products importer and distributer, to global commodities firm, Trafigura, over a year ago.
The power generation contract therefore now represent the group’s foray into electricity generation, for which it is understood to have an ambitious 10-year electricity plan that would cumulatively cost about US$2 billion and could result in the generation of enough power for domestic use and exports by 2018.
The 200 MW project is one of several being implemented by government to deal with the country’s power crisis that has been worsened by decreasing electricity generation at Kariba Power Station due to diminishing water levels at Kariba Dam.
Zimbabwe generates an average of 1000 megawatts against an installed capacity of 2245 megawatts. This is against the country’s peak demand of 2200 megawatts.
Hwange Power Station is generating an average of 440 megawatts, Kariba 460 megawatts, Harare 30 megawatts and Munyati 17 megawatts. The situation is worsened by decreased water levels at Kariba and breakdowns at Hwange. The country has been resorting to imports from southern African nations, who of late have also been experiencing electricity shortages.
Based on Sakunda Holdings’ immediate and long term power solutions to the country presented to the Ministry of Energy, the Dema project would constitute phase one of its intended multi-billion dollar project that would see the company producing 870 megawatts by 2018.
In the first three months of implementing the project, Sakunda undertook to provide 200 megawatts through diesel. In the subsequent phases, the company would use its own heavy fuel oil, CBM and Hydro power to generate electricity, culminating in the production of 870 megawatts of power by 2018.
The cost of power would go down from the implementation of price of 15,67 cents per kilowatt to 10, 45 by 2018. The average price in the southern Africa region is 14 cents per kilowatt.
Among Sakunda Holdings partners in implementing the project are ARUP, the world’s best infrastructure consulting company in 2014/15; Energyst, manufacturer of CAT temporary power units; Aggreko, world’s temporary power generation company; and Trafigura.
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