$160 million boost for Zesa

ZESA Holdings will this week secure a $160 million loan from Stanbic South Africa if a power purchase with Namibia's power utility, Nampower is brokered.

The Stanbic loan was extended to Zesa's generation unit, Zimbabwe Power Company, to finance development costs relating to expansion of Kariba South.

This follows signing of the $354 million engineering, procurement and construction deal between ZPC and Sino Hydro, the Chinese firm awarded the contract to expand Kariba South's capacity by 300 megawatts.


Kariba South, which ordinarily should be a peaking load station, but now used to carry base load due to serious deficits, has a capacity of 750MW.

A source told The Herald Business last week that the agreement would be signed this week as part of key conditions for release of the loan funds.

Apart from proceeds of the power exports to Nampower, ZPC will pay back the loan from China Eximbank using proceeds from domestic sales of electricity.
The agreement to be signed this week is for 80 megawatts at load factor of 50 percent, which means effectively ZPC will supply only 40MW.

The loan from Stanbic will be used to finance development cost for expansion of Kariba South at an estimated total cost of $533 million. Sino Hydro only obtained funding for engineering, procurement and construction.

Fears were that growing demand for power, when the economy overcomes current challenges, will constrain future economic growth prospects.