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ZESA defends Nampower deal

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The $40 million loan facility from Nampower was the only feasible financing option to save the Hwange Themal Power Station from collapse, an official has said.
Namibian’s power utility, NamPower, pumped US$40 million three years ago into the refurbishment of the plant but frequent breakdowns still plague the power station.
Patrick Farai Chivaura, Zesa’s business development and planning manager, last week told delegates to the Zimbabwe National Chamber Of Commerce Annual General Meeting in Gweru that the loan was the only viable option to save the power plant.
“As Zimbabweans we should be grateful for the Nampower loan. If it had not been for the loan Hwange Thermal Station would have collapsed,” said Chivaura.
To support economic growth, Chivaura said the parastatal had no capacity to put up new power plants and the private sector should take the initiative.
“The long term-project (greenfield projects) which include Gokwe Thermal Power Plant with a projected capacity of 1 400 mw and the Batoka hydro power plant (800MW) are not a preserve for Zesa but whosoever has the investment muscle qualifies’’ he said.
Chivaura was quick to say that tariffs charged by Zesa were sub-economic.
‘’Cost reflective tariffs (should) be implemented without delay. The current tariffs only achieve 40% operations maintenance,” he said.
According to the Nampower agreement entered into by the two power utilities, it was agreed that in return for the $40 million facility, Zesa would deliver 150 megawatts of power to NamPower for five years.
This is part of the power purchase agreement (PPA). In January, the then Energy and Power Development minister Elias Mudzuri caused an uproar when he said Zesa would in future only be allowed to export power to NamPower if it was generated at Hwange. He later backtracked saying that Zesa would honour its deal with NamPower despite the power utility struggling to meet domestic demand.
Government needs close to $1 billion to rectify problems affecting the power station, while a further $3 billion would be required to construct new power stations.
Zimbabwe is facing a power deficit of 1 500 MW daily due to the faults at Hwange while the country’s three other thermal power stations at Bulawayo, Munyati and Harare are not producing any electricity.
The country needs 2 200 MW of power daily. Last week, President Mugabe said the Bulawayo Power Station which has a capacity to generate 90 megawatt would soon be operational.
The Botswana government, through its Botswana Power Corporation has offered to refurbish the power station at a cost of $10 million in exchange for half the electricity generated by the station as that country is also facing a shortage of electricity.
The country is relying on 750 MW produced at the Kariba hydro plant, which is producing at full capacity. The other sources of electricity are imports from Mozambique, the Democratic Republic of Congo and South Africa.

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