- Zimbabwe has obtained a US 42 million loan from Exim Bank of India to upgrade existing energy generation infrastructure in the country.
- The first amount, valued at $23 million, will be used to finance, renovate and upgrade the Bulawayo thermal power plant.
- The second loan, worth $19.5 million, will be used to finance the second construction phase of the Deka pumping and water collection station.
Bulawayo thermal power plant has production capacity of 90 MW but is only generating 20 MW because two of the plant’s five generating units are out of service. The plant was initially commissioned in 1957.
The second loan will be used to construct the second phase of the Deka pumping and water collection station. This station will facilitate the transport of water from the Zambezi River to the Hwange power station.
The time limit for repayment of these debts is 20 years, with a grace period of 5 years. The interest rate set is 1.75%.
Zimbabwe wants to give a new impetus to its policy of access to electricity throughout the country.
Eskom recently resumed power supply to Zimbabwe after reaching a payment schedule agreement. In May Eskom cut power supply to Zimbabwe from 450MW to just 50MW pending full payment. Zimbabwe last month paid Eskom US 10 million after not paying the South African utility since October 2018. An additional US 23 million is still outstanding to Eskom.
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
More related news: The Minister also recently announced that he is contemplating cancelling over 30 Independent Power Producer contracts because the projects have never materialised. Read more
Author: Bryan Groenendaal