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Breaking News in the Project Management World
Tuesday, March 02, 2010
US$132m for Zimbabwe's Hwange Thermal Power Station rehabilitation
Reported by Henry Mkhwananzi in Harare
ZIMBABWE ELECTRICITY SUPPLY AUTHORITY (ZESA) has secured loans and grants amounting to US$132 million from the Development Bank of Southern Africa (DBSA) and African Development Bank (ADB) for rehabilitating the Hwange Thermal Power Station. According to a report by "The Herald" (a government owned newspaper), the amount will be released once repayment conditions of the loan have been worked out.
In the Zimbabwe Investors' prospectus (containing priority investment projects and other key projects in both the public and private sector of the Zimbabwean Economy) published soon after the formation of the Government of National Unity, the state owned power company submitted a funding requirement of US$900 million for three projects, i.e. rehabilitation of Hwange Thermal Power Station, expansion of Kariba South Hydro-electric Power Station and establishment of new mini hydro-electric projects.
A recent major breakdown at Hwange Thermal Power Station has resulted in severe power shortages in Zimbabwe. In a statement to The Herald, ZESA CEO, Eng Ben Rafemoyo said "Three out of six power generating units at the power station have been repaired and the other three would be operational before the end of March".
Hwange Thermal Power Station has a design capacity to generate 750 megawatts (MW) and is short of generating capacity even if all power generating units are working flat out. Zimbabwe needs 2 000MW of power supply but generates less than 1 000MW. The country is currently relying on the Kariba Hydro-electric Power Station which is generating at a maximum of 750 MW. There are three small thermal power stations at Harare, Munyati and Bulawayo which are not fully operational and require US$150 million to be operational. The country also imports power from Mozambique, Zambia, South Africa and the Democratic Republic of Congo. Power imports are however dwindling owing to the regional power shortages.
Hwange Thermal Power Station was last rehabilitated in 2007 at a cost of US$40 million. ZESA borrowed the funds from the Namibian Power Utility (NamPower). Repayment of the loan was agreed in the form of power delivery of up to 150 MW at reduced tariffs to NamPower for a period of five years. The first 40MW was delivered in January 2008 and a 150MW flow commenced in October 2008 and has been sustained to date.
Power shortages in Zimbabwe have adversely affected key sectors of the industry which have had to acquire generators and inverters as alternative sources of power supply.
For several years, ZESA has adopted the demand-side management approach through load-shedding. ZESA has however had to abandon its published load shedding schedules due to acute power shortages and resorted to the power utility disconnecting power supply to consumers who failed to settle their bills.
The loan repayment conditions for DBSA and ADB facilities is anticipated to have a severe impact on tariffs which may not be good news to consumers who already view current tariffs as unaffordable.
ZIMBABWE ELECTRICITY SUPPLY AUTHORITY (ZESA) has secured loans and grants amounting to US$132 million from the Development Bank of Southern Africa (DBSA) and African Development Bank (ADB) for rehabilitating the Hwange Thermal Power Station. According to a report by "The Herald" (a government owned newspaper), the amount will be released once repayment conditions of the loan have been worked out.
In the Zimbabwe Investors' prospectus (containing priority investment projects and other key projects in both the public and private sector of the Zimbabwean Economy) published soon after the formation of the Government of National Unity, the state owned power company submitted a funding requirement of US$900 million for three projects, i.e. rehabilitation of Hwange Thermal Power Station, expansion of Kariba South Hydro-electric Power Station and establishment of new mini hydro-electric projects.
Hwange Thermal Power Station has a design capacity to generate 750 megawatts (MW) and is short of generating capacity even if all power generating units are working flat out. Zimbabwe needs 2 000MW of power supply but generates less than 1 000MW. The country is currently relying on the Kariba Hydro-electric Power Station which is generating at a maximum of 750 MW. There are three small thermal power stations at Harare, Munyati and Bulawayo which are not fully operational and require US$150 million to be operational. The country also imports power from Mozambique, Zambia, South Africa and the Democratic Republic of Congo. Power imports are however dwindling owing to the regional power shortages.
Hwange Thermal Power Station was last rehabilitated in 2007 at a cost of US$40 million. ZESA borrowed the funds from the Namibian Power Utility (NamPower). Repayment of the loan was agreed in the form of power delivery of up to 150 MW at reduced tariffs to NamPower for a period of five years. The first 40MW was delivered in January 2008 and a 150MW flow commenced in October 2008 and has been sustained to date.
Power shortages in Zimbabwe have adversely affected key sectors of the industry which have had to acquire generators and inverters as alternative sources of power supply.
The loan repayment conditions for DBSA and ADB facilities is anticipated to have a severe impact on tariffs which may not be good news to consumers who already view current tariffs as unaffordable.