Home » Business » Firms Discuss Gwayi Power Station Funding

CHINA Africa Sunlight Energy and a leading Chinese bank are discussing terms of a possible loan worth $1,6 billion to fund the setup and construction of a coal mine and a power station in Gwayi, an official said.

The company is a joint venture between Old Stone Investments of Zimbabwe and Shandong Taishan Sunlight.

China Africa intends to spend US$2,1 billion on building a 2 100 megawatt plant, but will initially generate 300 MW by mid 2015 and reach the planned capacity five years after commissioning the plant.

The company is also planning to build a coke oven battery to process coking coal.

“China Africa and its partners are coming in with 20 percent of the total cost of the project and the remainder will be sourced from international financiers,” general manager Mr Charles Mugari said.

“We have identified a serious partner and we are hoping to start developing mine shafts by June (this year) while the construction of the power station will start a month later. The projects will run concurrently.”

Zimbabwe is facing serious power shortages due to inadequate generating capacity, with businesses and households enduring long periods of load-shedding.

The country, with vast potential for energy investments, is generating an average of 1 200 MW against demand of 2 300 MW. Zimbabwe has coal resources of between 10 billion tonnes and 15 billion tonnes, according to Government estimates.

Investors, mainly from Asia, are showing interest in Zimbabwe’s energy sector and are looking at generating electricity from solar, coal and methane gas.

Chinese investor Sino Hydro won the contract to expand Kariba Hydro Power Station at a cost of $368 million. Sino Hydro has already started working on preparations for the project, which will add 300 MW to the national grid.

China Machinery Engineering Company was contracted to expand Hwange Thermal Power Station at a cost of US$1,2 billion with generation capacity expected to increase by 600 MW.

Two Chinese companies — China Jiangxi Corporation and ZTE Corporation — are among three companies that recently won tenders to build 100-megawatt solar plants in Gwanda at a cost of US$184 million each.

Indian state-owned Bharat Heavy Electricals Limited and Shandong of China are among companies that have expressed interest in partnering RioZim Limited in setting up 250 megawatt plants at its vast coal fields of Gokwe.

The short-term strategy envisages the construction of a number of smaller power plants over the next 10 years, RioZim said in a statement recently. Its energy unit Rio Energy was in the process of bringing in technical and financial partners.

Source : The Herald