HomeNewsBungling stalls $3bn Kariba power project

Bungling stalls $3bn Kariba power project


Bureaucracy and bungling in the government has stalled the $3 billion Kariba South Bank power station expansion, a development that has led to the expiry of a memorandum of understanding (MoU) signed between government and
Sinohydro Corporation limited of China.

The one year MoU signed last year in April was due for extension in April this year to enable the conclusion of an agreement between Zesa/Zimbabwe Power Company but is yet to be extended.

Documents at hand show that spirited efforts by Sinohydro to have the deal re-signed has so far hit a brick wall.

Last September, Sinohydro submitted its comprehensive project implementation proposal including conceptual design, construction, methodology, work programme, site organisation, financial offer and financing proposals.

“The valid period of the MoU signed on April 8 2010 will be extended from April 8 2011 to December 2011, to conclude the Contract Agreement between Sinohydro and Zesa/ZPC,” reads part of the MoU signed by Finance minister Tendai Biti on behalf of the government.

The revelations come at a time stakeholders on Tuesday castigated Zesa for high tariffs and excessive load-shedding.

In a recent letter to the deputy chief secretary economic research and policy analysis, Sinohydro Corporation representative Wang Liping, said the company has been expanding North Bank Power Station in Zambia, with funds from the China Export-Import Bank (Eximbank).

“As per work progamme, main civil works will be completed by this October. Therefore, it is possible to kick off the construction of the expansion of Kariba South Bank Power Station within a short time after the contract agreement signed by your government and Sinohydro by the end of this June,” said Liping.

“Sinohydro promises to start the project desin and preliminary works at its cost prior to the financing closure.

“With this regards, Sinohydro will make efforts toward development and construction of the expansion of Kariba South Bank Power Station. I wish Your Honour could urge relevant authorities to launch the contract negotiations between Sinohydro and Zesa/ZPC so as to conclude the contract agreement and start the implementation of this project.”

Fully owned by the government of China, Sinohydro has completed over 100 medium and large-size hydro-power stations generating over
1 000MW each.

“With the rapid recovery and development of the economy in your esteemed country, there is the looming demand for power supply accordingly.

Your Excellency also recognised the urgency and importance to increase the generation capacity to meet the demand of economic development and poverty reduction through expanding the Kariba South Bank Power Station,” Liping said in his letter.

Documents also show that Sinohydro have already secured support to fund the project from the China Eximbank.

Stakeholders have also called for the unbundling of entities currently operating under Zesa Holdings and to privatise all power generating stations in order to turn around the fortunes of the country’s power utility.

In recent years, Sinohydro has successfully assisted some foreign governments and local authorities securing funds from China for the development and construction of almost 30 large energy projects in Africa, Asia and Latin America.

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