ZPC secures $43m loan

HARARE - The Zimbabwe Power Corporation (ZPC) has received a $43 million loan from Standard Bank Namibia towards the on-going 300 MW extension of Kariba South Hydro Power Plant.

The loan, to be paid through a long-term power purchase agreement (PPA) between ZPC and NamPower, will allow Namibia currently facing an imminent energy deficit to benefit from consistent supplies.

The PPA, according to the banking concern, provides a long-term and sustainable cash flow stream to ZPC, enabling the entity to raise further funding for new projects and rehabilitation of existing infrastructure.

“It was an ideal opportunity for the bank to get involved. NamPower buys power from ZPC and therefore it was important for us to support our power sector through this loan facility,” Amit Mohan, head of corporate banking at Standard Bank Namibia said.

“The facility is significant in its contribution to increasing its power generation in southern and central Africa. The execution of this innovative finance structure was the result of Standard Bank’s local presence in both jurisdictions and its strong relationships with key stakeholders,” Mohan said.

The facility, according to the bank, makes up 10 percent of the engineering, procurement and construction costs for the expansion project, with ChinaExim Bank providing the balance of 90 percent on condition of Sinohydro being appointed as contractor to the project.

This comes as the $533 million project has been brought under scrutiny amid allegations of price inflating with government calling for strict supervision of its implementation. The project, which targets 2018 as the completion date , seeks to increase power generation at Kariba South to 1050MW by constructing two 150 MW additional generating units, with $91 million having already been disbursed towards its consummation.

Sino-Hydro has been contracted to expand Hwange Thermal Power Station generating capacity by adding 600MW under a $1.1 billion contract.

Zimbabwe is currently facing a power deficit now expected to end in 2017 as it pursues  various power initiatives expected to lift the country’s electricity generation capacity from the  current daily power generation capacity of 1 500 megawatts against peak daily demand of 2 200MW.

The country is currently augmenting its power requirements through imports from Mozambique , while its former supplier Eskom battles with its own country’s power challenges.

Comments (1)

ZPC: Zimbabwe Power Company not corporation

Stavo - 19 February 2015

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