Home » Industry » DBSA Avails Funds for Power Projects

The Development Bank of South Africa has availed funds to help Independent Power Producers develop bankable projects to solicit for capital from international financiers. Zimbabwe Energy Regulatory Authority chief executive Engineer Gloria Magombo said it was worrisome that some IPP’s were failing to secure funding to package their projects. “The major challenges which were identified when people were asking why those projects were failing to take off in Southern Africa was the issue that the projects were not properly packaged.”

However, DBSA had come in to support the projects.

Eng Magombo could not reveal the exact amount of funding that was availed but she confirmed that so far three IPP’s have benefited from the fund.

“The projects require a lot of processes that include power purchasing and full feasibility studies and it has to be bankable. The companies have to engage various stakeholders, ensure fuel supply and they also have to go to tender before they get final grid licence.

“DBSA, however, came on board and availed the required funding for the projects,” said Engineer Magombo.

She said small power projects take between 18-24 months to construct unlike big ones that take four years. The regulator has licensed various large electricity generation projects, investing in 11 new projects with a combined capacity of 5 400MW and value of $10,1 billion.

She said all new projects were looking at trading in the Southern African Power Pool (SAPP) and ZERA is working closely with SAPP in co-ordination of regional power generation projects for optimisation of available resources in the region.

The country’s National Energy Policy calls for a capacity expansion of 800 MW at the Batoka Gorge hydropower power station by 2020, 300MW at the Kariba South hydroelectric power station by 2016 as well as other smaller hydropower plants.

Major independent power generation projects are expected to roll out in 2016 amid indications that the country’s energy regulator is yet to finalise regulatory processes The projects are expected upon full implementation to produce over 5 000 megawatts combined, a development that will ease the perennial power crisis on the economy.

Among the independent power producers is China Africa Sunlight which is a 600 megawatt project currently awaiting the finalisation of the bankable grid.

Shangano Power Plant in Hwange is also another independent plant expected to produce 600 megawatts. These two projects are moving at a faster rate and will be going for financial closure soon.

“The major challenge is that the projects need capital that is above $1 billion. For instance, the Hwange project would require $1,8 billion.

“Many investors have expressed interest in Zimbabwe’s power sector considering that our financial market has no capacity to take these projects,” Magombo said.

She said Lusulu will produce 2 000 megawatts and mobilisation of finance is being finalised as the lead financier had been found.

She said SAAP has been involved in co-ordinating even for state owned utilities which have access to the DBSA fund.

Source : The Herald