Zimbabwe to import 400MW to bridge power deficit




COMMODITIES News Wire Company News Investing 1h ago Zimbabwe Starts Further Power Cuts Due to Eskom Outages Ray Ndlovu, Bloomberg News Electrical power lines hang from transmission pylons in Mpumalanga, South Africa, on Wednesday, Aug. 7, 2019. Eskom, South Africa’s biggest polluter, said emissions of particulate matter that cause chronic respiratory disease are at their highest level in two decades as the state power utility’s financial meltdown has seen it skip maintenance and has triggered strikes. Electrical power lines hang from transmission pylons in Mpumalanga, South Africa, on Wednesday, Aug. 7, 2019. Eskom, South Africa’s biggest polluter, said emissions of particulate matter that cause chronic respiratory disease are at their highest level in two decades as the state power utility’s financial meltdown has seen it skip maintenance and has triggered strikes. , Bloomberg

STATE power utility, Zesa Holdings, intends to import up to 400 megawatts from Mozambique and Zambia as part of measures to end a debilitating power crisis, a senior executive said.

This comes as Zimbabwe, blighted by long periods of load-shedding, is spending up to US$20 million of scarce forex on power imports every month, Zesa executive chairman Sydney Gata revealed.

Dr. Gata said in an interview this week Zimbabwe was importing between 200-400 megawatts from the region and partly blamed the scenario on delays by the Treasury to sign an independent power producer (IPP) implementation agreement.

The agreement would have expedited the development of IPP projects, which reportedly have significant output potential. In fact, Dr. Gata contends Zimbabwe should, at the very least, be exporting excess power.

Demand for power in Zimbabwe reaches about 2 200 MW, especially during winter peak, but the country can at best only produce roughly 1 400MW due to limited installed capacity and unreliable facilities.

The gap between demand and supply is now being minimised through imports, which sees the country part ways with over US$20 million each month, and load shedding, which usually stretches for 12 hours a day.

Dr. Gata said 20-35 percent of electricity imported by Zimbabwe from both Zambia and Mozambique, came from IPPs while the sector’s contribution to domestic generation in Zimbabwe stood at a meager 1,5 percent.

“This is the lowest I have ever come across anywhere in the world,” Dr. Gata said.

“We are importing because the Government (Ministry of Finance) has been sitting on an implementation agreement for IPPs for over two years now, we should not be importing.”

Efforts to get a comment from Minister Ncube and secretary for finance George Guvamatanga were not successful by the time of going to print on Friday.

Asked how the agreement the Treasury has not signed could help end the rolling power cuts engulfing the entire country, he said, it was critical for State guarantees project developers needed to source outside funding.

The Zesa executive chairman said licensed IPPs in Zimbabwe had the potential to generate 6000MW, of which there was a realistic possibility 600MW could easily be actualised.

This amount, Dr. Gata said, was more than the country needed to secure adequate supply and do away with expensive imports, which are gobbling huge amounts of the forex industry desperately requires.  

Zimbabwe’s domestic currency is failing to hold steady against the greenback on the black market due to limited US dollar availability, which drives speculation that hurts the economy. 

The Reserve Bank of Zimbabwe runs a weekly auction system, a major source of affordable forex, and is saddled by a nearly US$200 million backlog resulting from shortages of hard currency.

 Dr Gata said the state power utility had since taken measures to dilute the impact of the power deficit by seeking imports from EDM of Mozambique and ZESCO of Zambia.

“We are going to get 400 MW from Zambia, Mozambique and repairs currently underway at Kariba South, which should be completed in December,” Dr Gata told Business Weekly.

He indicated that Zesa had negotiated for 280 MW from Zambia and 180 MW from Mozambique, where the country will soon start getting power after once it has cleared outstanding payment for earlier supplies.

Zimbabwe’s major power generation facilities are the 1 050MW Kariba South power station, a hydroelectricity plant, and the 900MW rate Hwange Power Station, which is fired with coal.

While Kariba South has some challenges firing at full throttle due to limited water availability after two consecutive years of drought, Hwange frequently breaks down due to its old age.

HPS, which was completed in the mid-80s, has outlived its design lifespan, which reduced its reliability and output potential and averages just about 450MW when operating at full potential.

The Government has since enlisted Sinohydro of China to undertake capacity expansion to add 600 MW at Hwange. The project, slowed down by Covid-19 restrictions globally, has reached 72 percent completion and will connect to the grid by the end of 2022.

Notably, Zesa has seen little progress on planned refurbishments of its small thermals in Bulawayo, Munyati and Harare, which can generate an average of 100 MW individually.

The Government of Zimbabwe is also working with Zambia on the development of the Batoka Gorge project, which could add 1 200 MW to the grid from generators on the Zimbabwean side.

Parties to the deal have now completed feasibility and environmental impact reviews and are now working on fundraising for the project.

Both countries entered a memorandum of understanding (MoU) for the development of the project in February 2012. The African Development Bank (AfDB) Group was named as the lead financier and coordinator for the $5,2 billion projects in April 2017.

Construction activities on the project are expected to be started after reaching financial closure in 2019, while commissioning is expected after 2024. 

The bi-national project is expected to create approximately 6 000 employment opportunities. – Herald