In an effort to increase capacity the Zimbabwe Power Company (ZPC) has contracted a $1.1 billion deal for expansion of the Hwange Thermal Power Station. This is in a bid to increase Zimbabwe’s capacity that requires approximately 2 200MW at peak demand, but is only able to generate an average of 1 300MW.
The engineering, procurement and construction contract will add 600 megawatts to the national power grid and is expected to be signed between ZPC and Sino-Hydro in Harare this week. Government had initially awarded the contract for expansion of Hwange 7 and 8 to China Machinery Engineering Corporation (CMEC), but cancelled the deal after it failed to secure funding.
“The contract was initially awarded to CMEC, but was cancelled and awarded to Sino-Hydro. We then negotiated with Sino-Hydro and left the EPC contract figure at $1,148 billion,” a source said.
A team of experts from ZPC visited China during September to conduct a due diligence on the capacity of Sino-Hydro to build thermal power plants, since it is widely known for hydro power plants.
ZPC visited two thermal power stations Sino-Hydro has constructed in China under partnerships with local authorities. Sino-Hydro owns 70% of the power stations visited. One of the power stations visited during the tour has capacity to produce 620MWx2 while the second, with design capacity for 3 000MW has only phase one completed and is producing 750MW.
“We also visited their factories in Dong Feng, which manufacture turbines and generators as well as TBEA, which manufactures the transformers they used,” the source added. The fact that the deal to be signed this week between ZPC and Sino-Hydro pertains only to the EPC cost of the project means this figure will increase after the development cost are added.
Sino-Hydro had earlier won the contract to expand Kariba South hydro power station to add 300MW to the plant’s capacity of 750MW. Kariba will be upgraded at an estimated cost of $533 million. The EPC contract for Kariba South stands at $354 million. It is expected that this will take at least 36 months to complete.
Government is undertaking various initiatives to increase the country’s power generation capacity to deal with rolling power cuts. This is one of its priority projects under the Zim-Asset policy, the government’s medium-term policy from 2014 to 2018.
Government is also working with Zambia to build a hydro power station at Batoka Gorge, on the Zambezi River after the two resolved differences over a previous joint power project.
As such, the Zimbabwe government has also approved private projects for hydro, thermal, solar and biogas power projects. This includes RioZim being awarded a licence to build a mega thermal power plant in Sengwa, Gokwe North.