Firm secures US$120m for Afrochine solar plant
Nelson Gahadza Senior Business Reporter
African Transmission Corporation Holdings (ATC), which specialises in infrastructure project financing, says it has reached financial closure for about US$120 million needed for the construction of a 100 megawatt photovoltaic (PVC) solar power plant to supply ferrochrome producer Afrochine Smelting.
Mr Victor Utedzi, a director with ATC, said the company was also tasked by Dinson Iron and Steel Company to develop two power projects to augment the firm’s power supply from the national grid.
For Afrochine, ATC will build a 100MW PVC solar power plant and a 100 MW wind project to supply Dinson.
“The PVC solar plant is being developed adjacent to Afrochine. We have signed a 25-year power purchase agreement with Afrochine. ATC is the developer with its partner Power China.
“We have finalised all agreements and reached financial closure, and the financing is upwards of US$120 million, including debt and equity from local financiers, and, most importantly, we have been able to bring international financiers to the projects,” he said.
According to Mr Utedzi, iron and steel, ferrochrome, and coke production are large carbon dioxide-emitting operations; therefore, sustainability is also an important way by which to grow economies.
He said construction works were expected to commence within the first quarter of 2024, drawing down from the equity finance that is already available.
“We are just finalising the documentation and loan agreements, fulfilling all conditions for drawdown; otherwise, within the first quarter, we are actually starting construction at Afrochine,” said Mr Utedzi.
He noted that commercial operations are expected in the first quarter of 2025 after about 12 months of construction on the 100MW project.
“We expect to create about 600 jobs for the construction of this project,” he said.
Mr Utedzi said the wind power project, to be constructed in the Mamina range in Mhondoro, follows a memorandum of understanding (MOU) between the Government and Power China, which was signed in 2014.
He said that since that period, Power China has been conducting wind resource studies at the site, whose results had shown there were strong enough wind blows to support the production of about 500MW.
“A 20-year power purchase agreement has been signed with Dinson. We are the developers, together with Power China and other partners. We are now in the licensing stages of the project, but from primary indications, we are seeing strong interest in the equity, and we are talking to our debt financiers on that,” said Mr Utedzi.
He noted that the wind project was slightly behind schedule in terms of actual construction, which is expected to start in the second quarter of 2024 after starting the solar project.
“It takes a bit longer to construct a big project, and we are giving it 18 months.
The beauty of the wind project is that it does not necessarily have to be commissioned all at once; there would be staged commissioning, and within the first 12 months of construction, there would be commissioning of some of the turbines.
“By the third quarter of 2025, that is when we expect to finish the 100MW, but within the second quarter, we would already have 50MW for Dinson to alleviate power shortages,” said Mr Utedzi.
He said the two projects, with a combined output of 200 MW, would improve the power supply to the group’s operations and contribute to the stability of the country’s energy sector. Dinson’s first phase would require 50MW, but operations at full capacity would require 500MW. The company is also constructing an on-site 50 MW thermal station, among other energy initiatives.