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Hwange power plant

Herald Reporter
The Zimbabwe Power Company yesterday signed the US$1,1 billion agreement with Chinese firm, SinoHydro, for expansion of Hwange Power Station, in yet another milestone following President Mugabe’s visit to the Asian nation where several deals were sealed.
Zimbabwe and China sealed deals in infrastructure, energy and power during the President’s visit in August. The expansion of Hwange Thermal Power Station units 7 and 8 will add 600 megawatts to the national power grid.

The project will take 42 months to complete from date of financial closure, with ZPC and Government wanting financial closure concluded in the next six to 12 months.

Energy and Power Development Minister Dzikamai Mavhaire said the project showed Government’s resilience in the face of challenges, adding that benefits of the current efforts will be felt by generations to come.

“Hwange Units 7 and 8 will be a brownfield coal -ired project next to the existing Hwange Thermal Power Plant,” he said.

“It relates to engineering design, procurement, construction and commissioning of 2×300 MW power units at the existing Hwange Power Station,” Minister Mavhaire said.

He said the engineering, procurement and construction (EPC) contract will also cover transmission infrastructure to evacuate the 600MW to Insukamini and Marvel substations in Bulawayo and to Sherwood substation near Kwekwe.

“It will be constructed at an estimated EPC contract cost of US$1,174 billion,” he said.

“The cost will rise to US$1,5 billion, including development costs such as technical consultancy fees, loan interest and trust account for servicing the loan once draw-downs on the loan begin.”

Minister Mavhaire said they had requested Sino Hydro to start preliminary work on the expansion project while working on financial closure.

The deal marks another milestone in national efforts to end Zimbabwe’s chronic power deficits after ZPC recently concluded a similar deal with Sinohydro to expand Kariba South’s capacity by 300 MW.

Zimbabwe is working on expanding generation at Kariba South and Hwange among a host of public and private led initiatives aimed at closing the demand- supply gap to end the chronic power shortage.

The EPC contract would be funded from a China Export and Import Bank loan on 80 percent concessional and 20 percent commercial terms.
ZPC would mobilise the balance for the $1,5 billion total project.

The expansion is expected to have multiple benefits that encompass job creation, as espoused by the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.

Sinohydro vice president for Africa, Mr Wang Xinhuai said they were honoured to participate in the two important national projects, which will greatly promote Zimbabwe’s economic development.

Zimbabwe requires about 2 200 MW at peak of demand, but is only able to generate an average of 1 300 MW.