ZPC, Intratrek sign $200m deal
Golden Sibanda Senior Business Reporter—
THE Zimbabwe Power Company has signed the country’s first national solar project with private company, Intratrek Zimbabwe, for construction of the 100 megawatt Gwanda power plant. The deal paves way for Intratrek and its engineering, procurement and construction partner, CHINT Electric, to start looking for the $202 million required to fund the project. This includes all duties and other statutory payments.
Intratrek and its Chinese EPC partner will construct the solar power plant in Gwanda as part of ZPC’s initiatives to resolve the country’s power deficit by tapping into solar energy. Two similar projects are lined up for Insukamini (Bulawayo) and Munyati. Each of the three will generate 100MW, giving a total of 300MW from the solar power initiative.
The State Procurement Board awarded the (Insukamini) project worth at $197 million to ZTE Corporation and the Munyati solar project for an EPC cost of $163 million to Number Seventeen Metallurgical China.
The Herald Business understands that ZPC also signed the contract for Munyati later on Friday last week, as progress on the projects gathers momentum to plug the country’s power deficit. The ZTE Corporation deal will be signed this week. The deal for Gwanda was signed by managing directors of the two firms, Intratrek’s Wicknell Chivhayo and ZPC’s Noah Gwariro at an event attended by several executives from Intratrek, ZPC and the Chinese electrical/engineering group.
Among the high profile executives from the two Zimbabwean companies, present at the signing ceremony, were CHINT Electric Company Limited vice president Dr Lin Bosheng. CHINT is the largest manufacturer and seller of low-voltage electrical products in China and specializes in the R&D, production and sales of more than low-voltage electrical products. Its parent CHINT Group Corporation generates revenue in excess of $7 billion annually and employs over 23 000 people. It has installed more than 10 000MW solar plants in China.
Speaking after the signing ceremony Mr Gwariro said there was need to move with speed to ensure the project gets underway given the debilitating power deficit blighting the country. Zimbabwe is facing serious power shortage, worsened by down scaling of Kariba due to dropping lake water levels, with generation averaging 900MW against peak demand of 2 200MW.
Latest reports say output may further be reduced due to the continuous residing of the Kariba Dam water levels after poor hydrological year in the feeder river’s, Zambezi catchment. The deficit has cost domestic, industrial, commercial consumers and economy billions over the years apart from the inconveniences this has caused to their activities and planning.
“As you are aware, we have been struggling to get take off and it is important that we have signed the deal, which will allow the companies to go out and look for funding. The companies will have to source the funding from various banks and typically it takes 12 months to get the funding,” he said. Commenting after signing the project deal, Mr Chivhayo said along with their EPC partners, they look forward to hitting ground running in the shortest possible time.
“We look forward to hitting the ground running in the shortest possible time. With the energy deficit in Zimbabwe, our vision as a local company is to ameliorate the power shortage. It is an opportunity and we thank the SPB for the award and ZPC as well. We look forward to concluding this solar project in the shortest possible time,” Mr Chivhayo said.
Dr Bosheng said the signing of the $202 million contract for the 100MW solar plant formed part of the first steps to the transaction and a lot of work will have to be put into sourcing the requisite funding working with all parties to the deal.
He said the period to completion of the project also depended on “the conditions from the Zimbabwean side; normally the sovereign guarantee and 15 percent equity contribution and other documentation required by the banks”. It may take 6 to 12 months to reach financial closure, Dr Bosheng said, taking from experience in other countries.