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Monday, 10 February 2014

Hwange expansion stalls

Plans to expand the thermal Hwange Power Station (HPS) have stalled after the Chinese contractor who won the right to undertake the project, China Machinery Engineering Company, failed to secure funding eight months after winning the tender, says Zimbabwe Business News.
Zimbabwe produces about 1,200 megawatts (MW) against demand at peak periods of 2,200MW.

Government, through the Zimbabwe Power Company, is working to close the deficit by expanding HPS for an additional 600MW and Kariba South for 300MW. Zimbabwe has not invested in expansion capacity since independence.Zimbabwe Power Company managing director Noah Gwariro said while the company had made significant progress on funding for the Kariba South expansion, things looked grim for HPS with the contractor failing to honour obligations.

“It has taken too long to conclude the funding arrangement, it is more than eight months since it won the tender for Hwange.

“They have not showed us the term sheet, which explains whether the funding is a loan or grant. The term sheet would also show terms of the funding arrangement. They over promised on what they could do on the funding,” Gwariro said.

Expansion of HPS requires US$1.3 billion dollars, but the cost will increase to US 2-billion dollars including interest during construction, cost of supervising the project, maintenance reserve and funds required for coal supplies.