ZPC deal hangs in balance

18 Apr, 2014 - 00:04 0 Views
ZPC deal hangs in balance Hwange power plant

The Herald

Hwange power plant

Hwange power plant

Martin Kadzere Senior Business Reporter
ZIMBABWE Power Company may re-tender bids for Hwange Thermal Power Station expansion, nearly a year after naming China Machinery Engineering Company as the winning bidder of the multi-million dollar project, sources said.
Alternatively, Sino Hydro, which won the tender to expand Kariba Hydro Power Station, may be considered as it could take time to re-start the whole process.

CMEC has failed to secure funding, a year after winning the tender. The lack of progress has allegedly raised strong reservations within Government, which is under pressure to close the demand supply gap that has spawned rolling power cuts.

Zimbabwe produces about 1 200 megawatts against demand at peak periods of 2 200MW. The country also imports an average 300MW from Mozambique.

“There are two options being considered, firstly to re-tender or to negotiate with the losing bidder to cut time that may be needed to restart the process,” said one source.

CMEC won the contract ahead of Sino Hydro which had tendered a bid price of $1,1 billion. The expansion of the Hwange Power Station is expected to add 600MW onto the national grid.

ZPC managing director Noah Gwariro was not at liberty to comment on the matter.

But in an interview with this newspaper early this year, Mr Gwariro said: “It has taken too long to conclude the funding arrangement, it is more than eight months now (since China Machinery Engineering Corporation) won the tender for Hwange.

“The challenge is that they (CMEC) have not secured funding and they keep saying they are working on it and they think they have got a good proposal,” he said.

“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,” Mr Gwariro said.

Energy and Power Development Minister Dzikamai Mavhaire told local media last month that “we are still at standstill”. He said CMEC had failed to provide a funding plan.
“We have already made gestures to both of them and the Ambassador of China as a diplomatic way. We have concluded as Government of Zimbabwe that CMEC will possibly find it a bit difficult to be able to extend Hwange Power Station. But because they are coming from a friendly country, we want to solve this in an amicable manner.”
He however, could not comment on the latest developments.

Zimbabwe is battling to ease power shortage in the country in recognition to its critical importance as a key enabler to economic growth as it recovers from the debilitating effects of Western sanctions that ravaged the economy for almost a decade.

Foreign investors, mainly from Asia, have expressed interest in the country’s power sector and are looking at generating electricity from solar, coal and methane gas.

Sino Hydro has already started working on preparations for the project, which will add 300 MW onto the national grid. Two Chinese companies — China Jiangxi Corporation and ZTE Corporation — are among three companies that recently won tenders to build 100-megawatt solar plants in Gwanda at a cost of $184 million each.

Indian state-owned Bharat Heavy Electricals Limited and Shandong of China are among companies that have expressed interest in partnering RioZim Limited in setting up 250 megawatt plants at its vast coal fields in Gokwe. The short-term strategy envisages the construction of a number of smaller power plants over the next 10 years, RioZim said in a statement recently. Its energy unit Rio Energy was in the process of bringing in technical and financial partners.

China Africa Sunlight Energy and a leading Chinese bank are discussing terms of a possible loan worth $1,6 billion to fund the setup and construction of a coal mine and a power station in Gwayi.

 

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