Zeco banks on power projects

HARARE - Zimbabwe Stock Exchange-listed engineering firm, Zeco Holdings, says it is banking on new energy projects in the country to boost its revenues and operations.

The group’s chairman, Philip Chiyangwa, yesterday said his company was confident of striking the right cords and return to profitability in the coming few months despite the country’s deteriorating economic conditions.

“The energy sector developments being experienced will border well for the group as the power stations refurbishments and solar energy will provide work for us and ensure bright prospects for the company,” he said.

This comes as Zeco, which recorded a $2,1 million loss in the full year to December 2015 and generated $0,549 million revenues, has set its eyes on the country’s burgeoning energy sector.

Zimbabwe has been experiencing crippling power shortages, with national demand at peak periods estimated at 2 200MW, against available generation of about 1 000MW prompting the country to open up the sector to private players.

On its part, the government — through the Zimbabwe Power Company (ZPC) — is working to close the electricity deficit in the country through the expansion of Kariba South Hydro Power Station to add 300MW to the national grid.

Work to expand Kariba by the winning bidder, Sino Hydro, is currently underway.

The country is also pursuing the Hwange Thermal Power Station expansion project which would see the country’s largest coal-fired power station adding two more units to give a combined generation capacity of 600MW.

It is also pursuing the Batoka Gorge power project along Zambezi River. However, government has failed to pay a $114,8 million interest on a Rhodesia and Nyasaland Federation-era debt to Zambia.

The interest emanates from a $70,8 million debt to Zambia.

Zimbabwe inherited the debt after taking over power generation assets that had been shared between the two countries when they still existed as Northern (Zambia) and Southern (Zimbabwe) Rhodesia.

The agreement on the Batoka project, situated about 54 kilometres downstream of Victoria Falls on the Zambezi River, was dependent on Zimbabwe’s commitment to pay off the $70,8 million debt.

Now, failure to repay the interest might result in the interest compound increasing and jeopardising chances of the project taking off.

ZPC is also pursuing the establishment of solar power plants and has identified possible sites in Gwanda, Zvishavane, Munyati and Plumtree.

The Munyati and Zvishavane sites already belong to ZPC, which is also planning a mini-hydro power station along the Gairezi River in Manicaland.

It was also expected that more than 15 Independent Power Producers (IPPs) licensed by the Zimbabwe Energy Regulatory Authority, with a capacity to generate more than 5 000MW of electricity would complement the Zimbabwe Electricity Supply Authority but very few projects have taken off the ground and fears are that it might take longer than expected for the IPPs to start generating electricity because of the heavy capital outlays required.

Now, government has expressed frustration over failure by IPPs to get their proposed projects off the ground, years after they were licensed to construct power stations, and has threatened to cancel some of the licences.

Comments (1)

Dream on Philip. One Viola Gwena once asked for an audit on all Zesa tenders to see why they are so silent to this day.Tenders were awarded corruptly and there is no money to fund their implimentation.The little Zesa funds availed to Chivhayo as deposite for him "winning " the tenders ,is all the money thats available ,$5m.1st re tender all tenders and rope in delloutts to conduct the tenders with the help of banks,international banks.

gandanga - 25 October 2016

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