The Zimbabwe Power Company (ZPC) signed an EPC contract with Sino Hydro of China for the expansion of Hwange Power Station on the 10th of October 2014. The expansion project will produce an extra 600 megawatts at a cost of $1.4 billion and will go a long way in alleviating the current power shortages. The deal came a month after the launch of the Kariba South extension project which will increase generation by an additional 300MW.
Speaking at the occasion of the contract signing ceremony, Energy and Power Development Minister Dzikamai Mavhaire said implementation of the project, which involves installation of two-300 megawatt plants, will take off in the second half of next year and will be completed in approximately 42 months. “The coming in of the additional two units will be a huge step in reducing load shedding,” Mavhaire said.
Mavhaire said government had granted the expansion national project status, and China Eximbank is expected to bankroll the project to the tune of $1.174 billion while ZPC will provide the remainder.
ZPC Managing Director, Engineer Noah Gwariro said 80 percent of the Chinese loan attracted concessionary interest rates, while the balance attracted commercial rates. The interest rates for the loan are yet to be agreed upon, but are expected to be around two percent for the concessionary loan and around five percent for the commercial one.
Sino Hydro vice president for Africa region Wang Xinhuai applauded the decision by government to grant the Chinese firm both the Hwange and Kariba expansion projects.
“It is Sino Hydro’s highest honour to participate in those two projects which will promote Zimbabwe’s economic development,” he said.
He said the company will sub-contract local companies to do most of the work associated with the project.