Govt ramps up power sector support as blackouts bite
FINANCE minister Mthuli Ncube says the government is pushing to complete its 600-megawatt Hwange 7 & 8 Expansion Project, with works now at 88.3% completion.
Key components at Zimbabwe’s largest thermal power station, including a 400Kv transmission line installation, are already complete.
Ncube told legislators during his mid-term budget and fiscal review presentation that Hwange Unit 7 is expected to be completed by November 2022 and Unit 8 during the first quarter of 2023.
This comes as Zimbabwe is grappling with crippling power shortages, with utility company Zesa painting a gloomy picture of the country’s power situation.
Zesa will no longer charging mining houses tariffs below cost of production as it is struggling to service a “ballooning power import debt”.
Exporters, such as mining companies, will be charged USc10.63 per kilowatt hour (kWh) from 1 August, Zesa executive chairperson Sydney Gata said in a letter to miners. Power from diesel-run Hwange plant, which is under expansion to add 300MW, is produced at USc10.70/kWh, translating to USc12 for customers, he said.
“Zesa will no longer be able to continue supplying electricity to exporting customers at USc9.86/kWh as it is unsustainable,” he said.
Zimbabwe generates an average 1 200MW to 1 300MW of its own electricity and relies on imports from Zambia, South Africa and Mozambique to cover shortfalls. Zesa requires US$17 million monthly for those imports, the company has said in the past.
Zimbabwe will pay US$6.3 million monthly upfront to Zambia over the next five years for electricity supply following an agreement with Zesco to supply 100MW.
The power export deal has three-to-five-year tenure and negotiations were premised on Zimbabwe making pre-payments for the 100MW of US$6.3 million per month.
Zimbabwe will import 100MW per month from Zambia which declared a power surplus of 1 156.8 megawatts following the commissioning of four out of five generators at its 750MW Kafue Lower Gorge Power Station.
To lessen power pressures, Zimbabwe accessed a US$998 million loan facility and, according to Ncube, cumulative disbursements to May amounted to US$443 million, with a further US$334 million expected to be spent up to year-end.
“In line with the loan agreement disbursements of ZW$138.6 million from the fiscus went towards payment of local costs and an additional amount of ZW$1 billion is being proposed to meet the same,” Ncube said.
“This was complemented by development partner support amounting to US$2.2 million in support of programmes and projects under the energy sector during the first quarter. The resources were channelled towards Alaska Karoi Power Transmission Project, Kariba Dam Project and the Emergency Power Infrastructure Rehabilitation Project Phase II.”