Zimbabwe looking for investors to avoid serious power shortage

Sep 25, 2005 02:00 AM

Armageddon beckons for Zimbabwe's power sector as government looks increasingly unable to rope in investors to undertake the $ 600 mm expansion of the country's sole power generator, Hwange Power Station (HPS).Senior executives at the national power utility, the Zimbabwe Electricity Supply Authority (ZESA), told business leaders gathered in the resort town of Nyanga earlier that the country was headed for serious power shortages come 2007.

Zimbabwe has to prepare for self-sustenance before 2007 when regional power suppliers are expected to run out of excess electricity to export. Expansion of HPS and Kariba South Power Station, which was supposed to have started 18 months ago, has not yet started.
ZESA corporate affairs manager, Obert Nyatanga said expansion of HPS would "in essence start in the first quarter of 2006". The unit could be running after three years, Nyatanga said. Zimbabwe imports more than 35 % of its electricity requirements.

Nyatanga said ZESA had sealed investment deals with CATIC of China but said the investors would only make a move after they have carried out geological surveys to ascertain the quantity of coal, which will be used to fire the thermals. CATIC has also been offered coal concessions in return for a $ 600 mm investment in Zimbabwe's power generation industry.
"We have to bridge the shortfall in 2007 and this means going back to the original refurbishment and maintenance plan," said Nyatanga. ZESA would also be trying to improve the operations of small thermals and raise power generation by around 200 MW.

Nyatanga said the central bank had availed $ 3.5 mm to ZESA to procure spares for the next six months. The Southern Africa Power Pool (SAPP), a Southern Africa Development Community (SADC) body for a common electricity market, said demand for power in the region has increased at a rate of about 3 % during the past six years. Despite the rise in demand, there has not been significant investment in the region's power generation.
ZESA says it has installed capacity of 1,990 MW, a net capacity of 1,825 MW while the peak demand as of 2004 stood at 2,069 MW.

The expansion project could result in Kariba South generating an extra 300 MW from 750 MW, HPS 7 & 8 generating a further 660 MW from 590 MW while the Greenfield Lupane Gas Project would generate 300 MW. But sources said dithering by the preferred Chinese investors has spelled doom for the country's shaky electricity supply situation.
Energy and Power Development Minister Mike Nyambuya admitted that lack of sound investment in the power industry would haunt the country in a year's time.
"There has not been corresponding expansion of power generation since 1987 and the withdrawal of international financiers has negatively impacted on the country's power generation," Nyambuya said.

Sources said since the World Bank-funded upgrade of HPS in 1987, the national power utility has not done anything to refurbish its equipment. Analysts also slammed ZESA for inefficiency and lack of policy direction, which has resulted in frequent power cuts. There is consensus that ZESA could have done something to avert a potential power blackout in 2007.
"We have trained them to talk, defend and do nothing. After World Bank, there is something, that we should have done," said a local businessman.

Source: Financial Gazette
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