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Mr Partson Mbiriri

Oliver Kazunga, Senior Business Reporter
SINO HYDRO, a Chinese firm contracted to undertake the $1.1 billion Hwange Thermal Power Station Units 7 and 8 expansion project, is on site carrying out preliminary works, an official has said.

In January, the Zimbabwe Power Company (ZPC) announced that it had raised $116 million as equity contribution towards the expansion of the thermal power plant.

If completed, the expansion project will see Hwange Thermal Power Station, which at the moment has an installed capacity of 920 megawatts, producing an additional 600MW to the national grid.

In an interview, the Permanent Secretary in the Ministry of Energy and Power Development, Mr Partson Mbiriri, said financial closure for the project had been reached.

“Financial closure for the project was done and we are looking forward to having the project’s ground breaking ceremony in June. At the moment China Eximbank is reviewing the project,” he said.

“Now all the conditions precedent have been fulfilled and they are now going through all the paper work to satisfy themselves that everything is in place and then we have the first release of funding.

“The contractor is already on site doing the preliminary works, which by and large relates to establishing the geophysical state of the site where they will be working.”

Mr Mbiriri said preliminary works at Hwange involve drilling into the ground to establish what the rock and soil formation at the site is like.

“That area of course is Kalahari sands area, so they have to establish how deep the Kalahari sands are and when they put their foundations, what the nature of the foundations will have to be, which takes them to designing the structure. And that’s the preliminary works they are doing at the moment,” he said.

Hwange Thermal Power Station expansion project will be completed in 48 months. Including the $116 million so far raised, ZPC has a contractual obligation of raising $314 million to cover project development costs. The remaining amount would be released as per project requirement.

ZPC’s equity contribution was the major condition precedent which was stalling the financial closure of the project. China Eximbank is expected to release a $998 million loan for the task and has said it was ready to disburse the funds.

Funding from China Eximbank would be disbursed in tranches with the first disbursement expected to be a quarter of the total project’s cost. In March this year, President Emmerson Mnangagwa commissioned and switched on the $533 million Kariba South Power Station expansion project, adding another 300MW to the national grid through Units 7 and 8.

The Kariba South Hydro-Power Station was commissioned in 1962 with an installed capacity of 666MW and subsequently upgraded to 750MW. The addition of Units 7 and 8 brought Kariba South Power Station’s total capacity to 1 050MW.

@okazunga