Senior Business Reporter
ZIMBABWE can now undertake major upgrades on some of its key power infrastructure, including strategic base-load power station Hwange, after India approved three loan facilities amounting to US$467 million for the power projects.
The loans entail a US$310 million facility for Hwange Power Station upgrade, US$110 million kitty for repowering Bulawayo Power Station and a US$47 million package for the upgrading g of the Deka Pump Station.
Indian Ambassador to Zimbabwe Rungsung Masakui said in an interview this week that the facilities had been approved by India with only a few loose ends remaining before disbursement.
He said economic and trade cooperation between Zimbabwe and India was now deepening under the new dispensation.
The Indian diplomat said trade and investment with India was projected to grow on the back of an improving economic environment, including measures to facilitate repatriation of export earnings through the US$1 billion investment guarantee fund.
Part of the growing co-operation between Zimbabwe and India relates to financial assistance towards three critical power infrastructure projects in Bulawayo and Matabeleland North, which are key economic enablers.
Hwange‘s large chunk
The most important of the three loans is US$310 million for upgrading of the Hwange Power Station, which has failed to undertake statutory and major overhauls in recent years due to funding limitations.
Hwange is of strategic importance to Zimbabwe, as it carries the bulk of the country’s electricity demand during peak and off peak periods and any mishap to it has serious implications to security of supply.
Zesa’s management told Energy and Power Development Minister Joram Gumbo recently that certain sections of the power station were now a safety threat to workers due to delayed maintenance.
The State power utility has failed to undertake all recent bi-annual statutory maintenance and 5 yearly overhauls due to foreign currency and capital funding challenges.
Management, however, expressed hope that the US$310 million loan from India will address safety and maintenance issues; extend the plant’s lifespan and boost output to rated capacity of 920MW.
“(The loan facility) was announced during the visit of the Honourable Vice President (Muppavarapu Venkaihah Naidu) in November 2018 for the upgrading of six units of Hwange thermal plant at a cost of US$310 million.
“So, at our level, we have approval from the Honourable Minister of External Affairs; here its Minister of Foreign Affairs. It (loan) has been sent to the minister of finance (India) for final approval, to just append signatures; so it’s a question of time,” Ambassador Masakui said.
The top Indian diplomat said the US$110 million for Bulawayo was a line of credit from the Government of India with low interest of 1,7 percent per annum and tenure of 25 years plus five years grace period.
Bulawayo Power Station repowering will entail, among others things, replacing old boilers with state-of- the-art boilers. The plant was built 60 years ago.
Ambassador Masukui said India agreed to increase funds for the repowering of Bulawayo Power Station, which has outlived its lifespan and has been decommissioned by Zesa.
This project will extend the life of the antiquated power plant, which can now only average 20 megawatts at best, to between 15 and 25 years while boosting its power out to about 120MW.
Initially, India had agreed to provide US$87 million for the upgrade, but revised the figure after the lowest bidder for the repowering works submitted a bid of US$110 million, which India again agreed to provide.
Deka pump funding
“We also have the Deka project, initially approved for US$28 million, but there is an additional US$19 million (needed for the works), so it comes to around US$47 million.
“This one is on the verge of signing and I think there are only small legal issues on the language remaining, but anytime it can be signed between the Eximbank of India and Ministry of Finance of Zimbabwe,” he said.
The Deka Pump Station is critically important to the functioning of Hwange Power Station, as it pumps water along a 40 kilometre long pipeline to the power plant for cooling during production of electricity.
Revamping the pumping station is also of paramount importance given that Hwange is undergoing a 600MW capacity extension to be completed in 42 months.
Ambassador Masakui said he had witnessed growing Indian investment in Zimbabwe over the last six to 12 months of the present administration’s leadership, including in the mining sector.
Further, he said Indian beverages giant, Varun, was planning to triple its investment in the country to meet growing demand and diversify.