Zimbabwe’s 300MW Power Project Receives $80m From China’s ExIm Bank

November 5, 2014 Editor Business, Energy

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VENTURES AFRICA – Moves to bridge the huge power deficits in Zimbabwe have been made in quick succession over the past 3 months and the latest of such is the release of $80 million, the first in a series of disbursements that will total $354 million eventually, from China’s Export-Import Bank (ExIm) for the expansion of the Kariba South Power Station.
The overall cost of the expansion project is estimated at $533 million and the Chinese firm Sino Hydro is facilitating the expansion in partnership with the Zimbabwe Power Company which is expected to fund the development costs. The duration of the expansion, which is expected to add 300 megawatts (MW) to the plant’s current 745 MW capacity, is about 40 months.
Hitherto, Zimbabwe has been experiencing severe power
deficits as it has been able to meet just about 59 percent of its energy needs; 1300 MW against a peak demand of 2200 MW.
“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. 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,” said Fullard Gwasira, a spokesperson for the Zimbabwe Electricity Supply Authority (ZESA).
Needless to say, the availability of power in sufficient quantities is central to the wellbeing of any economy, particularly one that has seen 50% of its GDP eroded by economic recession. Unnamed sources at Sino Hydro have confirmed the release and receipt of the funds, indicating that the project, which had already been initialized, will now gather more momentum.
“I can confirm we got about $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. 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,” an unnamed source indicated.
The Kariba South Power Project is one of the multiple deals struck by President Mugabe during his visit to China in August.