Zimbabwe tender board approves $2,3 billion energy projects

Zimbabwe tender board approves $2,3 billion energy projects

HARARE, June 30 (The Source) – Zimbabwe’s State Procurement Board has approved $2,3 billion worth of energy tenders over the last five years as the country battles to address the perennial energy crisis, official data has shown.

The country is faced with a power deficit due to limited investment in the capital intensive energy sector. Zimbabwe, which has five power stations, produces half of its peak demand of 2,200MW but the power utility ZESA is currently undertaking projects to increase capacity at Hwange Thermal Power station and Kariba South.

Hwange has installed capacity of 920MW but produces only 500MW due to the antiquated machinery, but there are plans to increase generation by a further 600MW. Kariba, with installed capacity of 750MW, will have an additional two 150MW units by 2017.

China’s Sino Hydro was awarded contracts for both projects.

According to figures availed to a Parliamentary Committee on Mines and Energy on Monday, the SPB awarded 205 tenders from 2010 to date. The figures show that the biggest tenders in terms of value were granted in 2013 when 36 tenders worth $1,7 billion were approved. This year 15 tenders worth $107 million have been approved so far.

The power utility is seeking at least $150 million in loans backed by the company’s debtors’ book, which has spiked despite government writing off the domestic energy debt last year.

Zimbabwe has been experiencing electricity shortages since 2006, while imports from Mozambique’s Hydro Cahora Bassa are too little to make up the difference.

As of December last year, the Zimbabwe Energy Regulatory Authority (ZERA) had licenced 12 new power projects — including the Kariba and Hwange projects — as well as nine independent producers (IPPs), that could generate an additional 3,500 megawatts, over three times current production by 2018.