Plans to set up a US$100 million diesel power generator project to alleviate current power shortages in the country are at an advanced stage, businessdigest has learnt.
The setting up of two diesel generator power plants, the Mutare Peaking Power Plant and the Dema Emergency Diesel Power Plant, come against the backdrop of a severe decline in water levels at the Kariba Dam, which has resulted in the drastic reduction in power generation.
In emailed responses to questions sent by businessdigest, the Energy Ministry revealed that the Mutare project entails construction of a 120 megawatt (2×60 MW) diesel/gas power plant with the cost of engineering, procurement and construction (EPC) contract, awarded to Helcraw Electrical (Pvt) Ltd, being US$92,4 million.
“Funding for the project is being sourced from Afreximbank. Once the project commences, it will take 17 months to complete,” the ministry said in its response. “Zimbabwe Power Company is expecting to reach financial closure by July 2016.”
The ministry revealed that the process of engaging a project consultant was in progress with planning permission granted by the Mutare City Council on February 12 this year.
It added that the tendering for the EIA consultant was ongoing.
As for the Dema Power Plant, the ministry said, Sakunda Holdings was awarded the contract to supply the rented emergency diesel power.
“Discussions on the Power Purchase Agreement between Sakunda Holdings and ZETDC are in progress in consultation with the Zimbabwe Energy Regulatory Authority (ZERA),” the Energy ministry revealed. “Currently, the contractor (Sakunda Holdings), is mobilising resources on site and once the project commences, it will take about 12 weeks to complete.”
On ethanol blending, the ministry said there should be more players to increase the supply of ethanol.
“New investors are encouraged to participate, provided they are agreeable to a partnership with government.
Government would therefore like more players in this area so as to boost ethanol supplies and introduce competition, which should in turn reflect on the price of ethanol,” the ministry said. “Currently Green Fuel is the only licenced ethanol producer that meets these requirements. The government through Arda has a 10% shareholding in the company and is working to acquire 51% shareholding in line with the Indigenisation and Economic Empowerment Policy.”
It added government has also given Triangle a temporary licence to assist Green Fuel, which has been facing challenges during the past four months.
According to Statutory Instrument 17 of 2013, ethanol purchased for the purposes of mandatory blending shall be obtained from a licenced ethanol producer, who is in joint venture partnership with the government.
Faced with a precarious power situation that spells doom for industry, cabinet in October last year approved the setting up of emergency diesel power plants, which will trigger a significant electricity tariff increase for the long suffering Zimbabweans.
Energy minister Samuel Undenge (pictured) last year said cabinet had agreed to set up a diesel power plant in Mutare by February 2016 to avert a worsening energy crisis that will have devastating repercussions on industry operating on a capacity utilisation of 33,6%.