eBusiness Weekly
Tawanda Musarurwa
Zimbabwe’s largest financial group, CBZ Holdings has been appointed principal financial partner for the raising of $140 million to fund the Gwanda solar project. Ministry of Energy and Power Development permanent secretary Patterson Mbiriri told Business Weekly recently that the development came after ZESA Holdings chose to go local on the financing of the project.
The State Procurement Board recently said that it had no objection in terms of the request by the Zimbabwe Power Company for the direct engagement of CBZ Bank to structure and issue energy bonds for Gwanda and Gairezi, another renewable power project ZPC is currently working on.
“For the Gwanda solar project, a decision has been made that it shall be supported using local financial resources and CBZ Holdings has been appointed to be the local leader in terms of raising resources for Gwanda solar.
“So you have in that arrangement a material mind-shift from borrowing from outside to borrowing within the country. But of course our capital market remains relatively small, we certainly can’t raise billions of dollars,” he said.
The decision to appoint a local bank to seek funds for the project comes after the Zimbabwe Energy Regulatory Authority (ZERA) recently granted Zimbabwe Power Company (ZPC) the licence to carry out the Gwanda solar plant project, which will have capacity to produce 100 mega watts.
Intratek had won the tender for the Gwanda solar project in October 2015. However, there have been reports that raising the requisite funding has been a challenge, but it remains unclear what the impediments to this are.
No meaningful progress has been registered on the ground, regarding start of actual construction works, although contractor, ZPC, had released $5 million to Intratrek Zimbabwe, the local partner in the solar power plant.
The $5 million, which was allegedly paid without a bank guarantee as required, was meant to cover activities such as feasibility studies, topographical surveys, borehole sinking, site clearance, geo-technical surveying, site fencing and the establishment of administrative structures.
The cost of the Gwanda project was earlier this year reduced from $170 million to $140 million. And Shanghai Stock Exchange-listed electrical engineers, CHiNT Electric Co, which was contracted by ZPC to build the 100 megawatt solar plant confirmed feasibility of constructing the power plant at the reduced price.
Mbiriri said there has been movement on the ground in respect of the project, which is part of Government’s ongoing effort to expand the national grid. “In terms of our capital projects the one that is running in front of others — notwithstanding media indications — is the Gwanda project. We want to expand the grid,” he said.
Multi-billion dollar asset company, CHiNT Electric Co, listed on China’s Shanghai Stock Exchange, will build the Gwanda plant while Bharat Heavy Equipment Limited, Angelique International Limited, both from India, and their local partner, Intratrek Zimbabwe will build Gairezi Hydro Project.
BHEL is a leading Indian hydro turbine manufacturer boasting an average annual turnover in excess of $7 billion, while Angelique International Ltd operates in over 34 countries and averages top line of $300 million per year.
Angelique International undertakes turnkey projects globally in power, water, irrigation and agriculture sectors and industrial projects in Africa, Middle East, South and South East Asia.
As part of a broad strategy to resolve power shortage in Zimbabwe, with generation averaging 1000MW against demand at peak periods of 1 400MW, ZPC tendered for other solar energy projects, each with capacity of 100MW.
The projects are Insukamini in Bulawayo, to be undertaken by ZTE Corporation of China and Munyati, to be developed by Jaguar Overseas Limited of India.
