via ZESA to invest $32m in fibre network | The Herald 27 November 2014 by Tinashe Makichi
ZESA Holdings through its subsidiary Powertel will next year embark on a $32 million fibre optic backbone network project set to improve the country’s connectivity.
The project requires the installation of around 1 850 kilometres of cable with surveys already been completed. ZESA group spokesperson Mr Fullard Gwasira yesterday confirmed the development to The Herald Business. He said the thrust of the project is to improve power monitoring and control of the national power grid at the same time increasing internet capacity being sold across borders.
“This project is going to support network expansion and increase redundancy and enhance quality of service to our consumers. This initiative will increase capacity for growth of the business as well as increasing electricity vending service,” said Mr Gwasira.
He said the project will be rolled out to support the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).
Last month, ZESA group financial controller Mr Eliab Chikwenhere told the visiting British trade mission that the power utility is responsible for the installation of fibre optic cables through Powertel.
On power generation, Mr Chikwenhere said there are investment incentives that have been put in place by Government for companies operating in the power sector. He said projects in the power generation sector are given the special “National Project Status”, which exempts any company from paying taxes on capital equipment and provides Government assistance with visas and work permits for international expert project staff.
Mr Chikwenhere said ZESA has solid experience of working with external consultants and all its current project feasibility studies were conducted by external specialists.
“Project tenders are all advertised through the ZESA website and has worked with both Norton Rose and KPMG for legal and financial support,” he said.
In a report released last week by the British business delegation dubbed the Zimbabwe Scope Report, it was noted that presently ZESA is facing a number of major challenges as demand outstrips supply by 800 megawatts. The report said this situation is made more difficult by the reduced availability of imports from the rest of the Southern African region.
The delegation said ZESA’s assets are “at all system levels”, either inadequate or obsolete.
“ZESA is heavily indebted and has very limited access to capital. Furthermore, there has been very limited investment in the sector for many years.
“The power utility hopes, in the short term, to restore and reinforce its transmission and distribution networks, negotiate for an increase in imports with regional partners, implement demand side management, and promote the use of alternative energy resources. It also needs to improve its credit control systems and will implement prepaid meters,” said the business delegation in a report.
ZESA has already made some headway in its generation development plans. The expansion of the Kariba Power Station by 300MW is in progress, and negotiations to expand Hwange by 600MW are taking place. Plant rehabilitation and upgrades are also underway where ZESA has begun to upgrade the distribution network and strengthening the grid.
Prepayment meters are being installed alongside mechanisms for third party power vending.
The report said ZESA is seeking international private sector engagement in the power sector as both partners to Government companies and as independent power producers.
“ZESA would like to see international partners participate as EPC contractors in transmission projects, particularly those who could bring their own funding. The power utility is conscious that energy access for all Zimbabweans is not possible via the grid alone and would be very supportive of any international specialists, who might be able to support the development of sustainable off-grid supply,” said the report.
In 2002 the power sector was formally liberaliased in Zimbabwe, a regulator was formed and the role of the state utility was intended to be reduced.
However, State-owned companies through ZESA Holdings, still dominate the market. IPPs play a very small role, producing less than 5MW through small-scale hydropower projects and bio-ethanol operations.
ZESA is entirely Government owned and has four subsidiary companies: Zimbabwe Power Company, ZESA Enterprises and Powertel which is an ICT subsidiary. ZESA is also promoting a number of transmission projects and these include the Orange Grove Triangle transmission line valued at $145 million and the Alaska-Sherwood line $64 million.
Pre-feasibility studies have been conducted for both projects and the delegation raised the issue of off-grid power solutions for rural communities.
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