Dangote shows interest in Sengwa

Source: Dangote shows interest in Sengwa | The Herald June 28, 2016

RIOZIM Limited says engagements with potential investors continue for the Sengwa power project but no one had shown enough interest to sign a sale agreement. This comes as Nigerian billionaire Aliko Dangote and an unnamed Chinese firm have made enquiries in partnering RioZim in its long standing power project.Group chief executive Mr Noah Matimba said that RioZim had received many expressions of interest, but the Nigerian billionaire’s Gangote Group and a Chinese firm had recently shown “more aggression” for the project.

But Mr Matimba said as they have indicated in the past, the issue of an off take agreement or lack thereof, remains critical in attracting potential investors. As such, RioZim has been talking to the Southern African Power Pool, but the problem is that SAPP is non committal.

“It remains so, as we read it from them, to say if I invest in Sengwa and produce power to the extent indicated of over 2 000MW, where will I sell the power. So we have been talking to the likes of SAPP.”

Mr Matimba said RioZim also attempted to engage South Africa’s power utility Eskom during one of the State visits by President Mugabe, but while there was interest, Eskom did not commit to a power purchase agreement.

It is estimated Sengwa has potential for over 2 000megawatts while an investment of $2,1 billion would be required to develop the thermal power project.

Sengwa power project, in Gokwe North, is based on a coal resource of 1,3 billion tonnes. It was touted as one of the solutions to the country’s power deficit. Zimbabwe has depressed demand for power of 1 400MW, but is currently only able to generate about 1 000MW, due to limited output at Kariba and old plants.

Government has since issued several licences to independent producers such as RioZim, while working on Kariba South and Hwange 6 and 7 extensions.

“The Sengwa project is one that continues to attract a lot of people; they come in, make enquiries and they go. They come for a second enquiry and disappear.

“However, in the past six months we have seen a couple that have come with a little bit more aggression, one is some Chinese company, the other is Dangote.

“They have continued to make enquiries, that is why we have signed non disclosure agreements. In this case, it can be coal resource, it could be information on general environment, some of them have gone as far as engaging with ZESA and with ZERA in terms of licensing and so forth,” he said.

COMMENTS

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    dlonra 6 years ago

    No one will commit because ZPF wants to take 51% when the investor has paid up front for it all