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Golden Sibanda Senior Business Reporter
The Zimbabwe Power Company has sealed a $1,1 billion deal with Sino-Hydro for expansion of Hwange Thermal Power Station. The engineering, procurement and construction contract, to add 600 megawatts to the national power grid, is expected to be signed between ZPC and Sino-Hydro in Harare tomorrow. Government had initially awarded the contract for expansion of Hwange 7 and 8 to China Machinery, Engineering Corporation, but cancelled the deal after it failed to secure funding.
“The contract was initially given to CMEC, but was cancelled and awarded to Sino-Hydro.

“We then negotiated with Sino-Hydro and left the EPC contract figure at $1,148 billion,” a source said.
A team of experts from ZPC visited China from 16 to 23 September to conduct a due diligence on the capacity of Sino-Hydro to build thermal power plants, since it is widely known for hydro power plants.

ZPC visited two of three thermal power stations Sino-Hydro has constructed in China under partnerships with local authorities. Sino-Hydro owns 70 percent of the power stations.
One of the power stations visited has capacity to produce 620MWx2 while the second, with design capacity for 3 000MW has only phase one completed and is producing 750MW.

“We also visited their factories in Dong Feng, which manufacture turbines and generators as well as TBEA, which manufactures transformers they used,” the source added.
The fact that the deal to be signed tomorrow between ZPC and Sino-Hydro pertains only to the EPC cost of the project means after addition of development cost, the figure will go up.
Sino-Hydro had earlier won the contract to expand Kariba South hydro power station to add 300MW to the plant’s capacity of 750MW.

Kariba will be upgraded at an estimated cost of $533 million. The EPC contract for Kariba South stands at $354 million. It is expected that this will take at least 36 months to complete.
Government is undertaking various initiatives to increase the country’s power generation capacity to deal with rolling power cuts.

This is one of its priority projects under the Zim-Asset policy, Government’s medium-term policy from 2014 to 2018.
Government is also working with Zambia to build a hydro power station at Batoka Gorge, on the Zambezi River after the two resolved differences over a previous joint power project.
Zimbabwe requires about 2 200MW at peak of demand, but is currently only able to generate an average of 1 300MW due to limited capacity.

As such, Government has also approved private projects for hydro, thermal, solar and biogas power projects.
Government has also awarded RioZim a licence to build a mega thermal power plant in Sengwa, Gokwe North.