HomeBusiness DigestZesa unveils investment projects

Zesa unveils investment projects

Ngoni Chanakira

AMBITIOUS Zesa Hold-ings (Pvt) Ltd has released investment projects for its various subsidiaries in a bid to solve the country’s worsening power shortages.

=”Verdana, Arial, Helvetica, sans-serif”>The southern African region, including Zimbabwe, is expected to experience power shortages beginning in 2007.

Operational challenges facing Zesa include persistent coal shortages at all stations, new imports contracts required for the 2005 to 2007 period as well as the fact that only one firm contract has been signed for 2005.

The contract was signed with Snel of the Democratic Republic of the Congo (DRC) for 150 megawatts.

Zesa has, however, released business plans for the Zimbabwe Power Company (ZPC), the Zimbabwe ElectricityTransmission Companyand the Zimbabwe Electricity Distribution Company.

The ZPC, which is 100% owned by Zesa, is planning generation investment projects worth about US$800 million. The transmission company has investment plans in the pipeline worth US$543 million while the distribution company’s investment projects will cost US$247 million.

Zesa is currently facing severe foreign currency problems leading to its being regarded as an interruptible customer by neighbouring suppliers such as the DRC, Mozambique, Zambia and South Africa.

The power utility also owes about $9 billion to local suppliers such as Wankie Colliery Company Ltd.

Zesa executive chairman Sydney Gata said planned power sector investment projects for the period 2004 until 2010 would cost a staggering US$2,416 billion.

Analysts contend that the plans are too ambitious and Zesa will never be able to raise the amounts judging from its poor pricing policies, escalating regional debts, as well as an increasing interest rates bill.

Gata said ZPC’s investment projects would cost US$799 million.

He said expansion of Hwange 7 and 8 would cost US$368 million while that of Kariba 7 and 8 would chew up US$175 million.

The projects would include upgrading the coal bed methane power generation facility.

Upgrading the gas turbine plant will cost US$200 million, gas extraction US$50 millionand proving commercial viability US$6 million.

Zesa is currently searching for local and international investors. Gata said investors could take up both the Hwange and Kariba projects.

According to the ZPC business plan, the future supply-demand situation was 650 megawatts for import displacement, 450MW for the expanded rural electrification pro-gramme, 250 MW for spinning reserve, giving a minimal additional of 1 350 MW for the period up to 2008.

Zesa said for its trans-mission investment pro-jects which would cost US$543 million, the costing was as follows: reinforcement bulk supply substations would take up US$40 million, interconnection to Hwange 7 and 8 US$90 million, interconnection to CBM project US$81 million, sub trans reinforcement for the Expanded Rural Electrification Programme (Erep) with Electricity End-Use Infrastructure Development (EEUID) US$108 million, 330 kV sub-stations for major customer projects US$81 million, second Cahora Bassa interconnector US$57 million, new 330 kV bulk supply sub-stations US$31 million, 330kV grid extensions US$50 million as well as the upgrade of 88 kV sub transmission network US$5 million.

Analysts however que-stion whether these projects will indeed be carried out with the serious foreign currency shortages that Zimbabwe is currently facing.

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