Home » General » Makomo Signs U.S $1,8 Billion Agreements

SOUTHERN Energy, a partner of Makomo Resources, has signed agreements worth about $1,8 billion with investors to finance construction of a 660 megawatt plant in Hwange, where the latter is operating its coal mine.

Well placed sources told The Herald Business that the company entered into a credit facility and investment equity with financial and technical partners from South Africa and China who were now working on financial closure.

“The financing model is a combination of both debt and equity and after reaching financial closure, we would know the time lines for commencing the project,” said the source.

Southern Energy partnered Makomo Resources, which owns coal deposits in Hwange, to build a power station as well as open more coal mines. The power project will be implemented in two phases, starting with a 330MW plant, the source said. Negotiations for the power purchase agreements were also ongoing.

Due to constrained capacity, Zimbabwe is able to generate an average of only 1 200MW against national requirement at peak periods of 1 800MW.

The acute shortage of power, which has been disruptive to commercial and domestic activities, is managed through either supply frequent rationing or imports.

It is against this situation that Government is working on projects to increase power generation with extension of Hwange through units 7 and 8 and expanding Kariba South.

Hwange units 7 and 8 will add 600MW to the national grid while expansion of Kariba will bring 300MW to current production.

Works on the two projects have already commenced.

Besides extension of the generation capacity of Hwange, plans are also afoot to overhaul first stage units of the power station to restore its 920MW capacity for another 25 years.

Tenders have also been floated for 100MW of a targeted 300MW solar project while investor selection is underway for a 120MW gasdiesel powered peaking power plant in Mutare.

Other initiatives on the cards include the preparatory works for the

4 x 200MW Batoka Gorge project, overhaul of Harare Power Station and repair and expansion of Deka Pipeline.

Batoka Gorge is on the Zambezi River, sitting on the border of Zimbabwe and Zambia and the project is being jointly undertaken by the two countries at central Government level.

The $28,6 million rehabilitation and expansion of the Deka pipeline, which supplies Hwange from Zambezi River, will cater for its future increased capacity water requirements.

Source : The Herald