via US$1.5bln China Hwange deal delayed 12/01/2015
THE Zimbabwe Power Company says talks with China Eximbank to fund the $1,5 billion expansion works for Hwange Thermal Power Station are likely to drag into the last quarter of the year although the regulator awarded the licence for the works to begin last month.
Hwange, the country’s oldest coal-powered station is producing about 650 megawatts from an installed capacity of 920 MW but government awarded Sino Hydro Corporation the tender to add two units to increase output by 600MW in June last year after another Chinese company, China Machinery and Engineering Company, had failed to secure funding more than a year after getting the contract.
Funding for the project was among the nine major agreements signed by President Robert Mugabe when he visited China last August.
But ZPC spokesperson Fadzai Chisveto told The Source on Monday that talks with China Eximbank for a $1, 1 billion loan, which started in October last year, could take up to a year to conclude.
“We are still in negotiations with China’s Export and Import Bank for the loan, but I cannot exactly say when the negotiations would be concluded as they can take up to a year to complete,” said Chisveto.
She, however, would not be drawn on ZPC’s alternative sources of funding should the negotiations fall through.
If the talks succeed, the balance of the money would come from ZPC’s internal revenue and from unnamed financial institutions.
The Zimbabwe Energy Regulatory Authority (ZERA) in December last year awarded the national power producing company a license “to construct, own, operate and maintain Hwange Power Station Stage III for the purpose of generation and supply of electricity”.
Chisveto noted that the licence was one of the “few things” that ZPC needed to get in place before work could begin.
“Now that we have been granted the licence, we are quite confident that we will begin work as soon as we get the funding,” she added.
The country produces 1,100 MW of power against peak demand of 2,200 MW, resulting in regular power cuts that have hit industry hard.
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