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THE government has signed a Memorandum of Understanding with three Chinese power companies to build a 1,200MW thermal power plant in the Gwayi area of Matabeleland North at a cost estimated between $3 billion and $5 billion over a period of five years.The deal, which was signed in Harare on Wednesday  by the Ministry of Energy and Power Development and three Chinese firms – Shanghai Electronics, Nan Jiang and Shenergy, comes two weeks after President Mugabe commissioned the construction of the $533 million Kariba South Power Extension Project which is expected to generate an additional 300MW by 2017.

Permanent Secretary for Energy and Power Development, Partson Mbiriri, signed the MoU with Shanghai Electronics president Zheng Jianhua and company representatives for Nan Jiang and Shenergy.

Development of infrastructure and utilities is one of the key pillars of Zim-Asset which identifies energy and power development as key enablers to productivity and socio-economic development.

“We’re short of energy and we want to resolve power challenges in the shortest possible time,” Mbiriri said.

“The MoU is an expression of interest by our good friends that they want to increase our power production. We’ll assist them in all procedures that need to be done.”

Shanghai Electronics president Jianhua said the three Chinese companies had the capacity to carry out the project.

“Shanghai Electronics, Nan Jiang and Shenergy are all integrated and complement each other,” he said.

“These three companies are the top power companies in the world so we hope and believe that we will be successful. We are not only providing energy and power to Zimbabwe but also the operations, maintenance and after service.”

Under the deal, Shanghai Electric would partner Shenergy Co Ltd and Nan Jiang Group to form Southern Africa Shanghai Energiser Company (SASEC), which would mine coal and build the power plant in Zimbabwe’s western coal mining belt.

The consortium and the government are in talks over a mining and power generation licence, Jonathan Kadzura, chairman of the southern Africa unit of Nan Jiang, told Reuters.

The first 300MW would take three years to produce. “They want to build the power station in three stages up to 1,200MW and they are going to finance it as an independent power producer,” Kadzura said.

SASEC would sell its electricity to the state-owned Zimbabwe Power Company and also export to the region.

“We can also offer finance and investments in the power industry. We hope we can help you build power stations and to mitigate the shortage of power,” Shanghai Electric’s president Zheng Jianhua said at Wednesday’s signing ceremony.

Zimbabwe is generating about 1,000MW against a national demand of around 2,200MW.

The country generates electricity at its five power stations located in Kariba, Munyati, Harare, Bulawayo and Hwange.

These power plants have a combined installed capacity of 1,960MW. The country is currently experiencing power outages, forcing companies and individuals to resort to expensive generators.

The country’s electricity generation capacity is expected to improve by 2017 after the completion of a string of power expansion projects funded by the Chinese.

The signing was witnessed by Deputy Minister of Finance and Economic Development, Dr Samuel Undenge and Zesa chief executive Engineer Josh Chifamba, among other dignitaries – Harare Bureau/Reuters.