Energy / Zimbabwe
Investments to tackle power deficit
Chinese finance is set to transform Zimbabwe’s power capacity igniting future economic growth
A shortage of energy requires an urgent extension of the national grid capacity.
Supplying energy for all of Zimbabwe’s 390,000 square kilometers would always be a challenge, but this year it has become a struggle. Daily power cuts that last hours are forcing factory and service sector workers to sit idle. As the electricity stops, they wait for the small and expensive generators to kick in, to begin work once again. Business costs are consequently rising and competitiveness is reducing. The lack of electricity has become an inconvenience that no one can avoid.
At present, around 1,216MW of power is supplied by five main stations, a number that is nearly half of the necessary amount for when demand peaks at 2,200MW. This year’s shortage has been particularly acute, as low water levels have left Kariba power station generating only 475MW of its 750MW capacity.
A target of 3,540MW has been set for 2018 and the Zimbabwe Power Company estimates that $6.5 billion is required to fund such projects. Lines of credit have already opened. Construction of a $92 million plant in a deal with Italian company, Ansaldo Energia will produce 120MW. Bulawayo Power Station is to be upgraded with $87 million from the Export-Import Bank of India.
Several financing deals from Chinese power companies have already been agreed. Deals worth over three billion US dollars will see two power plants capable of generating nearly 3,000MW built within the next ten years. Both the Chinese State Construction Engineering Corporation and China Africa Sunlight have announced plans to conduct feasibility studies into how to utilize some of the country’s large deposits of coal. In total, Zimbabwe’s energy sector will see three coal-fired power plants constructed, with CITIC Construction Corporation recently signing a preliminary agreement for another large-scale project worth over $500 million.
Zimbabwe’s power constraints have imposed significant setbacks for every sector. Capacity utilization, energy efficiency and output have been held back for several years restraining levels of economic growth. Boosting the supply of energy will have a transformative effect on Zimbabwe and power a stronger future economy.
