Zimpapers Logo

Golden Sibanda : Senior Business Reporter

ZIMBABWE Power Company has engaged the African Development Bank for help in floating bonds to raise an unspecified amount of funding meant to finance its power projects. Managing director Mr Noah Gwariro said the funds were required for equity contribution to Gwanda, Insukamini, Munyati, repowering of three thermals and Gairezi.The tenders for the three solar projects were awarded by the State Procurement Board to Intratrek Zimbabwe, ZTE Corporation and 17 Metallurgical China, respectively.

Each of the three solar power plants will have capacity to generate 100 megawatts. Combined, the projects will therefore add 300MW to the country’s national power grid.

Gairezi Hydro power project, to be constructed in the eastern highlands of Manicaland will generate 30MW. The EPC contract for this project has also been signed.

The Gwanda solar power station will be constructed at an engineering, procurement and construction contract of $202 million, Insukamini $197 million and Munyati $163 million.

“We have engaged the African Development Bank to help us float bonds for all our projects,” Mr Gwariro said, but the ZPC boss could not give the amount targeted of hand.

Mr Gwariro said negotiations were still underway in terms of the finer details of the ongoing work, as the power utility bids to resolve Zimbabwe’s debilitating power deficit.

Zimbabwe is currently resorting to supplementing its insufficient power generation with imports from South Africa, Mozambique and Zambia. Previously, it relied on load shedding.

ZPC has been scrounging around for the funding it requires to meet its contractual obligations of paying the equity portion of the total funding required to undertake the projects.

Recently, ZPC approached the National Social Security Authority with request for funding, but was told to wait in the wings, as the authority is currently pressed for cash.

Earlier reports indicated that NSSA did not have funding to spare, having doled out a significant amount of cash towards purchasing Vimpelcom’s stake in Telecel Zimbabwe.

“They (NSSA) have not turned down our request, but asked us to wait for about three months, as they currently did not have the money to give to us,” Mr Gwariro said.

If the initiative being pursued with AfDB comes to fruition, ZPC will be able to tap into the huge financial resources pool of institutions such as insurance and pension funds.

Finance and Economic Development Minister is on record saying there is need tap into pension funds and insurance assets to finance infrastructure development, especially energy projects.

The minister said Government would establish an instrument to mobilise investable funds from retirement savings as well as NSSA to support the infrastructural projects.

Since power projects are long term in nature, long term financial instruments such as bonds are therefore ideal sources of funding for infrastructure projects in the energy sector.