Zinwa invests $7m in Tokwe Mukosi power station

Source: Zinwa invests $7m in Tokwe Mukosi power station | The Herald August 26, 2016

Martin Kadzere : Senior Business Reporter

THE Zimbabwe National Water Authority has so far invested $7 million towards civil works for the construction of a 15 megawatt hydro power station at Tokwe Mukosi Dam. This will be in addition to several other multi-million dollar commercial projects that the authority intends to implement once the construction of the dam is completed.The dam construction, which commenced in the late 90s is expected to be completed before the beginning of the rainy season after Government committed to release the $20 million required to complete the project and clear outstanding arrears to the contractor.

According to a document gleaned by The Herald Business, the mini-hydroelectric project would provide additional cash flows from the water allocations to the power plant.

It is anticipated that at least $1,2 million in revenue would be generated from power plant.

The project cost includes evacuation infrastructure through a grid extension and Zinwa is at an advanced stage of finalising selection of an investment partner of the project.

Zinwa is looking at partnering the Zimbabwe Power Company or other suitable investment or a technical partner on the management, operation and maintenance of this project.

“The preferred investors would be entities or parties of repute in the energy sector with demonstrable strong financial and technical capacity,” read part of the document.

It is anticipated the plant would be commissioned and come on-stream within 24-36 months of commencement of works after completion of the dam wall construction.

The dam wall was designed with the potential of generating 15MW of power if the peak power facility concept is considered using the same water resource released for irrigation.

Power generated will be sold to the Zimbabwe Electricity Transmission and Distribution Company as the principal off-taker and will also be available to power Zinwa’s fisheries projects and lodge facilities around the dam.

Off take agreements, are intended to be negotiated with mining companies such as Renco and Unki Mines.

These companies have already expressed willingness to take up the additional power to be generated and “can confirm their expressions of interest”, the document said.

This would enhance bankability of the financing structure conceived for this investment.

Apart from the power station, irrigation will be the main economic value to be realised from the dam. At a yield of 364 000 megalitres per annum, the dam will have sufficient water to irrigate up to 25 000 hectares. Zinwa also plans to be a major supplier of Nile bream in Zimbabwe through entering partnership with prospective investors.

The authority has already established the breeding ponds, which will produce fingerlings for stocking the dam and other projects in the Lowveld region. This will provide an additional source of revenue as the product can be sold to local and South African market.

In addition, Zinwa is also looking at establishing a crocodile farming project which would be modelled along the lines of existing projects in Kariba.

This will generate additional revenues for Zinwa from the sale of game meat and crocodile skins to international markets. Capacity for value addition of the crocodile skins will also be fully explored.

The Government has been funding the construction of the Tokwe Mukosi from its own resources through the Public Sector Investment Programme. Since 2001, the Government has spent $262 million on the dam with an additional $13 million having been set aside in the 2015 National Budget.