BPC puts on hold power import talks

Source: BPC puts on hold power import talks | The Herald November 4, 2016

Business Reporter

BOTSWANA Power Company has put on hold talks for power imports from Zimbabwe following the closure of two major smelters in the western neighbouring country.BPC wrote to Zesa Holdings yesterday advising that poor global commodity prices have forced two smelters, which consumed about 80 megawatts of electricity to shut down.

“This means the demand has significantly declined rendering imports unnecessary. So negotiations have been put on hold until March (next year),” said one official.

The power utility wanted to raise $120 million by exporting 50MW to BPC for four years.

The deal would have seen Zesa pay a lump sum of $120 million which was to be part of the power utility’s equity injection into the expansion of Hwange Thermal Power plant.

“Zesa will now pursue other funding arrangements to raise the money for Hwange expansion,” another official said.

Zesa contracted China’s Sino-Hydro to expand generation capacity at Hwange, the country’s largest power plant at a cost of about $1 billion.

Previously, Zesa entered into a similar arrangement with Namibia when its power utility NamPower advanced $40 million for the rehabilitation of the Hwange plant. Zesa repaid the debt through exporting power to Namibia and the loan was paid off in January last year.

The expansion would see Sino-Hydro adding 600MW of electricity at the Hwange plant. Sino-Hydro was also contracted to expand Kariba Power Station to add 300MW. Zimbabwe produces an average of 1 100MW against peak demand of 1 400MW. To meet the shortfall, the country is importing up to 350MW from South Africa and Mozambique.

During the third quarter, Zesa missed its output target by 9 percent largely due to cash flow challenges and forced outages at Hwange plant. Zesa produced 1 758.24GWh against a target of 1 935.10GWh.