Walter Muchinguri Assistant Business Editor
The Government has awarded Sakunda Holdings a tender to immediately supply 200 megawatts of electricity to alleviate power shortages in the country that are set to heighten this month as a result of rapid decreasing generation at Kariba Power Station. According to a letter dated December 24, 2015 from the Permanent Secretary for Energy and Power Development Patson Mbiriri to Zesa Holdings chief executive Engineer Josh Chifamba, Sakunda Holdings was awarded the tender to install the plant and supply the 200 megawatts.
“The Government of Zimbabwe has approved the acquisition of 200MW Emergency Diesel Power Station at Dema substation. 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 of power from the diesel plant should not cause material negative impacts to the economy.
“Considering the urgency of the matter, the ministry recommends that you should now engage Sakunda Holdings for contract negotiations,” read part of the letter. Sakunda’s founder and chief executive, Mr Kudakwashe Tagwirei, was not reachable for comment yesterday. The Dema project was classified by Government as “urgent” and needed to “be expedited to avert critical power shortage”.
The Emergency Diesel Power Station at Dema Substation is part of the Sakunda’s ambitious 10-year mega electricity project that would cumulatively cost about $2 billion and expected to result in the country generating enough power for domestic use and export by 2018. This would be in line with the country’s Zim-Asset economic blueprint.
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 fledgling company producing 870 megawatts by 2018. In the first three months of implementing the project, Sakunda Holdings undertakes 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 leading temporary power generation company; and Trafigura.
It also has Stanbic Bank, CBZ Bank and Ecobank as financiers. Grant Thornton would come in as project accountants and Mhishi Legal Practice as legal advisors.
The 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 in Kariba Dam.