China Suspends Hwange Power Plant Refurbishment over Bank Account Raid

  • Chinese financial institutions have suspended the funding of the US $1.1bn Hwange 7 and 8 power refurbishment project.
  • The move forms part of the suspension of two other infrastructure projects which together total US 1.324billion.
  • The move comes after the government of Zimbabwe raided and diverted US $10m from an escrow account for the Robert Mugabe International Airport expansion project.
  • The three projects are currently funded by China Eximbank and other financial institutions.
  • The other affected infrastructure projects include the US 71m NetOne expansion project and US $153m Robert Mugabe International Airport expansion.

All three projects are at various stages of construction.

The seized funds were converted by government through the Reserve Bank of Zimbabwe into a local unit. The government raided the funds from an account holding dedicated investment capital for the expansion of the airport.

When completed, the expansion of the coal fired Hwange plant, which is 22% complete, is expected to add 600MW to the national grid. The project has created 3 000 jobs since commencement last year and is set for completion in 2023. The project is being implemented by Chinese EPC, Sinohydro.

Related: 160MW to be restored at Hwange Thermal Plant.

The Hwange Thermal Power Station is the biggest coal power plant in Zimbabwe with an installed capacity of 920 MW. It is owned and driven by the national electricity company ZESA Holdings LTD. It was built in two stages and consists of 4 units of 120 MW each and 2 units of 220 MW each.

Gross mismanagement, corruption, neglect of maintenance and part replacement has seen the pant deteriote over the last 15 years to the point of dysfunction and shutdown.

The Zimbabwe Electricity Transmission & Distribution Company (ZETDC) implemented a wide scale load shedding programme in May 2019 plunging the country into darkness. The country has been forced to cut power generation at their Kariba Dam power plant due to low water levels. The dam, on the border of Zimbabwe and Zambia, is only 34% full and cannot generate electricity at optimal capacity. The utility is also facing generation constraints at Hwange Power Station

South Africa’s state owned energy utility, Eskom, recently resumes supply of 450MW to Zimbabwe after a payment agreement had been reached. Read more

Author: Bryan Groenendaal


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