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Zimbabwe saves fortune on energy bill

by Staff Reporter
30 Dec 2018 at 09:35hrs | Views
Zimbabwe's energy import bill has dropped to about $1,2 million monthly from at least $48 million as efforts to invest in local electricity generation to underpin the envisaged economic growth begin to bear fruit. Energy imports have over the years demanded significant allocations of foreign currency to meet domestic and industrial demand.

But figures gleaned by The Sunday Mail showed that electricity imports have dropped from a peak of 400 megawatts per day to 50MW over the past few months.

Power imports gobbled more than $300 million in 2017, putting additional strain on the scarce foreign currency reserves.

Ministry of Energy and Power Development director of power development Engineer Benson Munyaradzi said the country did not import electricity during this year's festive season as local supplies proved adequate to meet demand.

As of yesterday, local power generating units were feeding 1 433 MW into the grid, which is sufficient to meet current local demand.

New power projects, particularly the expansion of Kariba South, are significantly pushing Zimbabwe towards energy self-sufficiency.

"At the moment, we are no longer importing a lot of power as we used to. From a peak of around 400 MW a day, now we import at worst 100MW, but normally it is around 50 MW.

"This translates to a cost of $12 million a week to about $300 000," said Eng Munyaradzi.

The expansion project took place at a time when Zimbabwe, just like other SADC member countries, were experiencing supply constraints, which prompted new investments to secure future supplies.

President Mnangagwa commissioned the $533-million Kariba Hydropower Station, which added 300 MW to the local grid, on March 29.

The Kariba South project began in 2014 after the country secured $320 million from the China Export and Import Bank, representing 90 percent of the total project cost.

Government, through the Zimbabwe Power Company, financed the remaining 10 percent amounting to $35,4 million.

Sinohydro – a Chinese State-owned hydropower engineering and construction company - was subsequently engaged as a contractor.

ZPC will, however, take over full control of the power station in two years' time.

But the impact of the major project is beginning to be felt in the economy as Government is now saving at least $45 million per month on its energy bill.

Of the megawatts fed into the national grid yesterday, Kariba - considered the workhorse - contributed the bulk at between 460MW and 918MW, followed by Hwange (486MW), Bulawayo (21MW), Munyati (17MW) and Harare (13MW).

Average daily national consumption is 1 400MW in summer and 1 600MW in winter.

Switch to Batoka
Government is now focussing on the 2 400MW Batoka Gorge Hydroelectric Power Station, whose power will be equally shared between Zambia and Zimbabwe.

Eng Munyaradzi said the scope of the Batoka power project will now be changed from a Public-Private Partnership (PPP) to a Build, Operate and Transfer (BOT) model.

The African Development Bank (AfDB) has since made a commitment to release $13 million that will be used to complete feasibility studies before the end of the first quarter of next year.

Eng Munyaradzi said Government will speed up the project as it has medium to long-term benefits.

"The (respective) ministers from the two countries met in December and they agreed that they are going to consult with their Heads of State on the project," he said.

"The project will now be operated as a Build, Operate (and) Transfer. Initially, we wanted to operate it as a Public-Private Partnership (PPP).

"We have already met General Electric, who expressed their interest. However, they are not the only company that has expressed interest, there are other European and Asian countries that have done so as well."

Parties to the deal hope to engage a contractor for the project next year, after which it will start in 2020.

The mega project is expected to create more than 10 000 jobs.

"We are expecting the project to create 10 000 jobs for the two countries, but there will also be a requirement for materials. For example, there will be high demand for cement; this means indirect jobs will be created.

"The plant will help the country edge towards self-sustenance in terms of energy. "This festive season we did not even import any electricity, we used electricity produced locally," added Eng Munyaradzi.

Upon completion, Batoka will be the biggest power generating plant in Zimbabwe, followed by Kariba, which is currently generating 1050 MW a day, and Hwange Thermal Power Station.

New projects
Zimbabwe recently secured more than $300 million to refurbish the country's biggest coal-fired power plant.

Additional units - Unit 7 and Unit 8 - are being constructed by Chinese firm Sinohyro after a groundbreaking ceremony held by President Mnangagwa on June 27.

There are separate renewable power projects that are being pursued by public and private players to augment supplies.

Experts say once Zimbabwe's economy fully recovers, it would need about 4 000 MW to power it.

Government is, however, confident that it will be able to export excess power to the region in the medium to long term.

Mining companies that are starting new projects have committed to developing new renewable power projects that will supply excess power to the national grid.

Karo Resources, for example, plans to develop a 100MW solar plant.


Source - Daniel Itai

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