US$1,4 bn funding for Hwange Power Station

US$1,4 bn funding for Hwange Power Station
xi-jinping

Chinese President, Xi Jinping, who will be in South Africa around that time for the Sino African Summit, will grace the signing ceremony in Harare.

GOVERNMENT is expected to achieve financial closure for the Hwange Power Station expansion project by the end of this year.
The total cost for the project is estimated to be US$1,4 billion, and China Export Import Bank(Eximbank) is expected to bankroll the project to the tune of US$1,174 billion, while the Zimbabwe Power Compny (ZPC) will provide the balance.
Reliable government sources said negotiations with Eximbank for a loan to fund the project are likely to be finalised in August, with the Minister of Finance, Patrick Chinamasa, expected to sign the loan agreement in November.
Chinese President, Xi Jinping, who will be in South Africa around that time for the Sino African Summit, will grace the signing ceremony in Harare.
“Negotiations with China Exim Bank are currently underway. We expect the lawyers to have the agreement ready by August this year. By November, we expect the agreement to be signed and work would start thereafter,” said a source who spoke on condition of anonymity.
Last October, ZPC signed an engineering, procurement and construction contract with Chinese company Sino Hydro Corporation.
Sino was awarded the tender to add two units at the power station in June last year after another Chinese company, China Machinery and Engineering Company, failed to secure funding 14 months after getting the contract.
Sino Hydro was also contracted to expand Kariba South Power Station to add 300 megawatts (MW) of electricity to the national grid.
Expansion work at the power station kicked off in September last year.
Hwange Power Station expansion project, which would see the country’s largest coal-fired power station adding two more units to give a combined generation capacity of 600MW, would ease power outages.
Zimbabwe has been experiencing crippling power shortages, with national demand at peak periods estimated at 2 200MW, against available generation of about 1 000MW.
The country has been importing from regional power utilities to cover the shortfall, but this has also not been enough to meet demand.
Imports are currently only coming from Mozambique’s Hydro Cahora Bassa, which has been supplying a paltry 50MW but on a non-firm contract. What this means is, Hydro Cahora Bassa has been supplying Zimbabwe only when it has enough to do so.
Electricity supply was expected to be one of the key drivers of government’s economic revival strategies under the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.
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