Financial closure for Hwange by H2

Source: Financial closure for Hwange by H2 | The Herald April 19, 2016

The Zimbabwe Power Company expects to have concluded financial closure for the $1,1billion expansion of Hwange Thermal Power Station towards the second half of the year, ZPC chairman Engineer Stanley Kazhanje has said. Eng Kazhanje said a team of negotiators comprising officials from ZPC, financial and technical advisors, is on the ground discussing the funding package for Hwange. Expansion of Hwange Thermal Power Station’s generation capacity will add 600MW to the national power grid. The plant is

producing an average of 500MW and plans are afoot to increase to 700MW ahead of higher demand for power during the winter period.

“Theoretically, the project has taken off and we are working on concluding financial closure towards the second half of this year,” Eng Kazhanje said during a tour of the power station and its suppliers of coal last week.

Among the major coal suppliers ZPC has engaged are Hwange Colliery Company, Makomo Resources, Coal Zim, Coal Brick and Chilota, to build stocks from 200 000t to 300 000t ahead of increased demand for power in winter.

“There will be a ground breaking ceremony once financial closure is done, we have got people on the ground discussing with our financiers,” Eng Kazhanje said.

The contract for the expansion of Hwange thermal power station units 7 and 8 was awarded to Chinese firm Sino Hydro, which also landed the tender for capacity extension of the 750MW Kariba Hydro Power Station. Kariba South is now at 41 percent completion level.

Government, through power utility Zesa Holdings, is working on increasing domestic power generation to bridge the gap between power supply and demand with production at 1 100MW against peak demand of 2 200MW. Zimbabwe is importing over 300MW from South Africa’s Eskom to ease its power deficit while discussions are in progress with other regional utilities, Lusemfwa of Zambia and EDM of Mozambique for more imports.

Several licences have also been issued to independent power producers to complement at least nine projects ZPC is working on, which will see Zimbabwe achieving excess capacity and exporting to the region from 2018 and beyond.

In terms of building coal stocks at Hwange for the winter period, Eng Kazhanje said co-ordinated effort is being made to overcome challenges relating to cash flows.

“Generally, we are happy, we came to see what sort of challenges the suppliers are facing and in terms of funding, we hope they will come around it,” he said.

He said the board was also pleased with measures to enhance technical and safety issues at the plant.