HomeIndustry SectorsFinance and PolicyZESA renounces power deal with the Chinese

ZESA renounces power deal with the Chinese

Kariba, as seen from
the Zimbabwean side
Harare, Zimbabwe — ESI-AFRICA.COM — 22 November 2011 – The Zimbabwe Electricity Supply Authority, (ZESA) has renounced the memorandum of understanding clandestinely signed between the Zimbabwean treasury and Chinese conglomerate Sino Hydro for the expansion of the Kariba South hydro-electric power project, opting for a more transparent tender process.

Kariba presently generates 750 megawatts (MW) of power at its peak and the agreement seeks to increase generation capacity by an extra 600MW. It was signed early this year by finance minister Tendai Biti and economic planning and development minister Tapiwa Mashakada.

Investment in the country has been subdued in the last decade with ZESA failing to provide uninterrupted power supply to the manufacturing industry. At time, the power authority switches off consumers for up to 12 hours as part of its haphazard load-shedding schedule.

ZESA chief executive officer Josh Chifamba told the Mines and Energy Portfolio Committee that the agreement awarding Sino Hydro the Kariba expansion work had jumped the gun and would cause problems with other Chinese companies, should it be implemented without going to tender.

“Sino Hydro made an offer, but it jumped the gun on many issues,” said Chifamba. “The feasibility studies had not been done. We were going to have problems with other Chinese partners. The only way was to go to international tender,” he said.

Chifamba said such large projects needed very high levels of transparency to encourage investment and participation by the most competent company through a tender process.

“We need maximum transparency to encourage funding. This would also give us an opportunity to evaluate the best tender and compare the services of the companies in an open manner,” Chifamba said.

The debt laden energy utility conceded that the perennial power shortages could only be solved by engaging in Public Private Partnerships (PPP) to build new electricity generation plants.
Zimbabwe’s power stations are operating at 50% capacity and producing 1,300 MW compared to a national demand of 2,400 MW. The utility meets the shortfall by importing from the DRC’s power company Snel, Eskom of South Africa and HCB of Mozambique.