THE Zimbabwe Power Company (ZPC) will sell 80 megawatts (MW) to Namibian power utility, NamPower, to raise $150 million for power generation projects, authoritative sources have said.
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ZPC, a wholly-owned subsidiary of Zesa Holdings, is in charge of power generation at Hwange, Kariba, Munyati, Harare and Bulawayo power stations.
Sources said yesterday the need to sell power to NamPower comes on the back of reluctance by banks to give ZPC and its parent company, Zesa, loans.
“Banks want security so they have to see that arrangement that cash will be coming. With that they can give us the loans,” a source said.
Zesa and NamPower had a similar arrangement before. In 2007, NamPower gave Zesa $40 million to refurbish Hwange Thermal Power Station. The debt was repaid through the export of 100MW during peak periods and 150MW off peak to Namibia daily for five years.
The pending export of power to NamPower comes at a time ZPC has applied for a retail supply licence to sell 80MW of power to large consumers to raise additional funds for the Kariba South extension project.
Chinese firm Sino Hydro won the contract to expand the country’s second largest power station by 300MW at a cost of $319 million.
The ground-breaking ceremony is set for next month and the project will take 42 months to complete.
In a notice on Sunday, the Zimbabwe Energy Regulatory Authority (Zera) said the power would be sold at a load factor of 50% to large consumers.
“The sale of the 80MW capacity will be done under a power purchase agreement between ZPC and large off takers to raise additional funds for the Kariba South Extension Project,” Zera said.
Zera added that the application for a retail supply licence by ZPC had been done in terms of the provisions of Section 40 of the Electricity Act (Chapter 13:19) of 2002. It said the notice has also been done in terms of Sections 3 and 4 of Part II of Statutory Instrument 103 of 2008 Electricity (Licensing) Regulations of 2008.
Zimbabwe is battling a power crisis as electricity generated is not adequate to meet demand.
The country was generating 1 352MW as of yesterday against demand of over 2 000MW.
This has seen local manufacturers resorting to generators thereby raising the cost of production making local products uncompetitive in the region.
However the power utility says it was working on expansion projects to generate more.
Government recently gave Sino Hydro a contract to expand Hwange Power station at a cost of $1,3 billion. The expansion would add 600 MW to the grid made up of two units of 300MW each takes 42 months to complete.