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India set to extend $310m loan for power plant

Ishemunyoro Chingwere Business Reporter
The Indian Government has expressed willingness to extend a $310 million soft loan to Zimbabwe to finance a rehabilitation programme for Hwange Thermal Power station that would entail upgrading the plant and extending its lifespan by a further 15-20 years.

The power plant has design capacity of 4 x120 megawatts and was commissioned between 1983 and 1985, meaning its lifespan expired around 2016 and has reflected in the high cost of operating the power station.

Hwange Power Station is the country’s second biggest power plant, although it currently to generate to a maximum 550MW out of a design capacity of 920MW due to old age. This also sees the country failing to meet demand of 1 600MW, against production of 1 400MW, internally.

As such, Zimbabwe imports some of the power it consumes from the region, mainly South Africa and Mozambique to cover deficit, which manifests mostly during peak demand periods, mornings and evenings. In an interview with The Herald Business in Hwange recently, Indian Ambassador to Zimbabwe Rungsung Masakui, said there was positive reception for the Hwange rehabilitation from his Government. Availing of the much-needed line of credit was on course, pending completion of the requisite paper work. The project will be financed through a loan from the Indian Government through the Indian Exim Bank.

“The Indian Government is keen to assist and co-operate with the people of Zimbabwe in projects that uplift your (Zimbabwean) people. This project (upgrading and life extension of the Hwange thermal power) is one such project which India is keen to help Zimbabwe and I can say we are just waiting for the finalisation of the requisite paperwork between the two countries before the $310 million can be availed,” said Ambassador Masakui.

Speaking to participants at a training workshop for Zimbabwe Power Company (ZPC) employees on efficient operation, care and maintenance of its power stations by Indian firm — Water and Power Consultancy Services (Wapcos), a Ministry of Energy and Power Development official noted the key role India continues to play in the development of the country’s power generation.

“We are grateful to the Indian government for supporting us to revamp our energy sector. India has been involved in a number of power projects here in Zimbabwe. We hope this partnership will continue as we seek to achieve economic transformation,” said the ministry official, Mrs Lucy Mabuwa.

Wapcos, which in October 2017 produced a detailed project report on the life expansion project, pegged its total cost at $450, but divided the project into two phases with the initial phase expected to cost $310 million.

The second phase, to cost $140 million, is mainly for the purchase of spares for the plant turbine and generator. With generation capacity set to be restored to original capacity 920MW, financing of the project will see the country attaining self-sufficiency and cutting on the 300MW currently being imported from the region.

Wapcos Chief Engineer and project manager Mr Sanjay Gupta, told this publication that the Indian investment will help minimise the Hwange plant’s forced power outages from the current 20 percent to just 10 percent.

“Skill upgrade (which Wapcos is currently doing for ZPC employees) will also help in extending the life of plant by using the $310 million Indian soft loan financing to extend the life of plant by another 15 to 20 years and will also increase the output by 300MW,” said Mr Gupta.

Source :

The Herald

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