Commercial Farmers Union of Zimbabwe

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ZESA

Zesa mulls 6pc tariff increase to cover salary arrears

Zesa mulls 6pc tariff increase to cover salary arrears

 

Felex Share Herald Reporter
Zesa Holdings has said it will have to raise electricity tariffs by six percent to cater for salary arrears amounting to $117 million arising from a gazetted 2012 collective bargaining agreement which management ignored.

The power utility conceded bungling by not honouring the collective bargaining, but is arguing that abiding by the award will result in the payroll shooting by $5,6 million per month, a figure that can only be raised through increasing tariffs.

The arbitrary award, which would have a heavy bearing on electricity consumers, was granted by retired Supreme Court judge Justice Ahmed Ebrahim and Professor Emmanuel Magade.

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Zesa Holdings is now offering the workers $21 million spread over four months, arguing that their demands were “unrealistic.”

Instead of paying the collective bargaining award when it was still affordable, the Zesa management for the past three years unsuccessfully contested the result which came out as a result of Statutory Instrument 50 of 2012.

Now, the figure has ballooned and has to be backdated.

The dispute is also likely to cost Zesa another $5 million in tax liabilities, according to calculations by the Ministry of Energy and Power Development.

Zesa head of finance Mr Eliab Chikwenhere said the firm was in a “parlous financial situation” and its liabilities exceeded the assets.

He said in any case, Zesa needed to raise tariffs to meet its obligations.

Responding to the ruling yesterday, a Zesa senior executive said any compliance with the award meant an increase in tariffs.

He said the firm was prepared to part with only $21 million to avoid increasing tariffs and burdening consumers.

“The demands by the workers are unrealistic, but we have come up with a concessionary figure which reflects what the business can pay,” said the senior executive.

“We admit we signed an agreement and we have to comply, but as a gesture of goodwill this is what we can afford. First and foremost, before any considerations, Zesa should be able to generate electricity and that is why we have $21 million as our maximum figure.”

Added the senior executive from Zesa: “Implementing the award will require a six percent tariff increase to meet the $5,6 million additional figure per month of the current payroll. This will burden the already overburdened consumer as well as impacting negatively on service delivery.”

The collective bargaining agreement provided for Zesa to effect a minimum increment of $275 and 12 percent grade differentials, 2,5 percent step (notch) differentials, non-pensionable allowance (30 percent of basic salary), $70 transport allowance and $23 canteen allowance (grade 1 to D2) with effect from January 2012.

In their ruling, Justice Ebrahim and Professor Magade said the power utility should honour the collective bargaining agreement and conduct a re-grading exercise.

They said Zesa should start paying employees according to qualification and seniority.

“The claimants should comply with the National Employment Council salary scales arising from the 2102 CBA,” reads the ruling.

“The claimants should, consequently, conduct a re-grading exercise so that all their employees are placed in their correct grades in the NEC salaries scales, according to each employee’s qualifications, date of entry into service and any other relevant factors, irrespective of the grade such employee currently occupies under the Zesa scales.

“This exercise should be back-dated until the date on which SI 50 of 2012 came into effect and any salaries and benefits should be calculated from that date, and should be completed within six months of the date of this award. Any back-payment should be paid within that period.”

No employee, the ruling stated, should, as a result of the re-grading exercise, receive salary or benefits lower than he or she currently received.

The arbitrators, while acknowledging Zesa was “not fully delivering what it ought to”, said it had created legitimate expectations among the workers and should honour that.

Reads the ruling: “Whilst it is true that public policy dictates that an award which has the effect of driving the employer into insolvency should not be made, it is equally true that where an employer has entered into an agreement with his employees he creates legitimate expectations amongst the workers. Public policy becomes something of an unruly horse which gallops in multiple directions.”

According to the Ministry of Energy and Power Development, the least worker is owed $1 628, while the highest paid (skilled) worker should get about $2 418.

But workers, through the Zimbabwe Energy Workers Union, claim the liabilities to be $5 607 and $37 102, respectively.

The power utility has more than 7 000 workers countrywide.

No tariff increase – Zesa

No tariff increase – Zesa

ZESA Holdings says it will not increase tariffs to cover salary arrears, dismissing earlier media reports of an imminent increase as incorrect.

BATANAI MUTASA
OWN CORRESPONDENT

In a statement yesterday, Zesa Holdings said it was not mulling an increase in electricity tariffs by 6%. “Electricity tariffs charged by Zesa are approved by the Zimbabwe Electricity Regulatory Authority and no such application has been tendered.”

A local media group had reported that the power utility indicated it would have to increase tariffs to cater for salary arrears of $117 million arising from a gazetted collective bargaining agreement which the company ignored.

However, in yesterday’s statement, Zesa said it had reached a deadlock with the unions in the 2012 collective bargaining exercise after which the matter was referred for arbitration.

The standoff over salaries between Zesa Holdings and its employees dates back to 2012 when the company allegedly refused to offer its employees’ wages based on Statutory Instrument 50/12 which was a result of collective bargaining between the power utility firm and the Zimbabwe Energy Workers’ Union and the National Energy Workers’ Union of Zimbabwe.

The Statutory Instrument sanctioned a basic salary of $275 per month for the least paid worker in the energy industry.

“The outcome of the award was such that Zesa could not afford to implement the award without posing a serious threat to the going concern of the business,” reads the statement.

It said industry norms in the electricity sector dictated that staff costs would not exceed 30% of revenue in the interests of better service delivery.

Zesa to increase power cuts

Zesa to increase power cuts

ZESA Holdings has warned consumers to brace for increased load-shedding outside the publicised schedules, citing a technical fault at Hwange Power Station as the reason.

PRIVILEGE SHOKO
OWN CORRESPONDENT

The power utility yesterday issued a statement warning consumers that they would be updated accordingly during the restoration process.

“Zesa Holdings would like to advise its customers countrywide that there will be an increase in load-shedding outside the publicised schedule due to a technical fault at Hwange Power Station,” reads the statement.

“Currently, there are two units generating at Hwange Power Station and customers will experience suppressed power supply until generation is restored to normal levels.”

Hwange power station is the biggest thermal power plant in Zimbabwe, with an installed capacity of 920 megawatts (MW) and consists of four units of 120MW each and two units of 220MW.

Zesa said engineers and technicians were working on restoring the generation to normal levels.

“Zesa Holdings sincerely apologises to its valued customers for the inconvenience caused,” reads the statement.

Zesa has recently blamed heavy rains that hit the country for the latest spate of power outages, saying it has experienced a number of faults due to inclement weather.

Zimbabweans have been subjected to load-shedding for years and economists say this has affected the industry, as most companies have had to cut short their operating hours.

The intermittent power cuts have also affected plant and machinery, some of which need constant power supplies.

Many households occasionally endure long hours of up to 12 hours without electricity, exceeding the normal load-shedding schedule, despite Zesa installing pre-paid meters in most households to help it manage demand and customer indebtedness.

Zim’s daily power generation drops

Zim’s daily power generation drops

Zimbabwe’s daily power generation has dropped to below 1 200 MW from about 1 400 MW that was being generated in recent months, statistics from the Zimbabwe Power Company (ZPC) show.

Zimbabwe is currently facing power shortages as national power demand at peak periods is estimated at 2 200MW.

Present generation capacity is far outweighed by demand, resulting in the shortfall being imported from regional power utilities.

According to the statistics as at 0730 hours on Friday, ZPC was generating 1 152 MW only.

Hwange Thermal Power Station sent out 547 MW and Kariba Hydro-Power Station 521 MW. The smaller thermal power stations Harare, Munyati and Bulawayo were generating 30 MW, 28 MW and 26 MW respectively.

ZPC said Unit 4 at Hwange which was taken out of service late last year for major overhaul works was contributing to some of the generation constraints being experienced.

“The revised return to service date (of Unit 4) is now 23 March 2013,” it said.

Meanwhile, ZPC managing director Noah Gwariro said ZPC was still working on securing funding for the re-powering of Bulawayo power station.

ZPC applied to the Indian government for funding of the Bulawayo project.

“Funding for this project is not restricted to the Indian Government only.

“We will accept other investors that are willing to partner with in the re-powering exercise,” he said.

The re-powering project for Bulawayo power station will take two years to complete, he said.

ZPC is targeting to produce over 9 799.06 GigaWatt-hours of electricity during 2015.

Due to the power deficit government, through ZPC, has embarked on several projects to increase power output through expanding existing power stations and building new ones.

For example, work is in progress to expand Kariba Power Station by an additional two units which will add a combined 300 megawatts to the national grid on completion in 2018.

Plans are also in place to add two units at Hwange Power Station which would have a combined generation capacity of 600 megawatts.

Zimbabwe is also working with the Zambian government to build the Batoka gorge power station which is expected to generate 1 600MW of electricity to be shared equally by the two countries. — New Ziana

Hwange Electricity Supply Company granted licence to generate power

Hwange Electricity Supply Company granted licence to generate power

 
 

THE Zimbabwe Electricity Regulatory Authority (Zera) has granted Hwange Electricity Supply Company a licence to construct, operate and maintain Hwange Power Station Stage III for the purpose of generating and supplying electricity to consumers in the region.

BUSINESS REPORTER

Zera chief executive officer Gloria Magombo in a statement yesterday said the licence allowed the company to supply electricity to any transmission, distribution or supply licencee who purchases electricity for resale and with the approval of authority to any consumer.

“Generation licence No GC0032 issued in terms of Section 4 (e) of the Energy Regulatory Authority Act Chapter 13:23 of 2011 as read with section 42 of the Electricity Act Chapter 13:19 Act no.4 of 2002 hereinafter referred to as “the Act”

“The conduct of the above –named licencee under this licensee under this license is subjected to the conditions as outlined below or later revisions to these conditions as are approved by the Zera hereinafter referred to as the authority, the terms as set out in section 47 of the Act and any other amendments to the relevant legislation,” Magombo said.

According to Zera’s recently published annual report for 2013, the authority said it received applications and licenced two independent power producers in an effort to bridge the gap between supply and demand. Zera said the producers — Hytoric Enterprises t/a Southern Energy with a capacity of 600 megawatts (MW) and Kupinga Renewable Energy with a capacity of 1,5 MW — had a combined output of 601,5MW.

Zera said it had reviewed the licence for China Africa Sunlight Energy Company from 400MW to 600MW.

The country has been battling intermittent power shortages as demand continued to exceed supply with Zesa currently generating about half of the national requirement of 2 200MW. This has led to increased load shedding.

According to Zera, the Kariba Hydro Power Station plant situated along Zambezi River generated an average of 569 MW while Hwange Power Station, a coal fired plant produced an average of 436MW in the past year.

Zera said the other small thermal power stations contributed a total of about 58MW with Harare Power Station contributing 16MW, Bulawayo Power Station 20MW and Munyati Power Station 22MW against a combined dependable capacity of 100MW.
According to Zera the country’s operational IPPs have an installed capacity of 102MW which are largely co-generation and small hydro technologies and these are Triangle, Hippo Valley, Chisumbanje, Border Timbers and Nyangani Renewable Energy.

Govt updating Batoka feasibility study

Govt updating Batoka feasibility study

Bus2Tinashe Makichi  Business Reporter
Government is updating an engineering feasibility study for the Batoka hydro-power project as efforts get underway to see if the project has potential to generate more than the initially projected 1 650 megawatts.The World Bank availed a $6 million grant early last year for feasibility studies to be undertaken before the construction of the project could commence.

On the basis of the World Bank grant, consultants have been appointed and the review of the feasibility study was given to an Italian company while the environmental and social impact study was awarded to a South African company.

The findings so far by the Italian firm revealed that the mega hydro project can produce more power as previously anticipated.

Zimbabwe Energy Regulatory Authority chief executive Engineer Gloria Magombo yesterday confirmed the development and said some progress has been made on the project.

“The feasibility is currently ongoing with the assistance from World Bank so that the project becomes bankable,” said Engineer Magombo.
Zambezi River Authority yesterday told The Herald Business that according to the work plan the engineering feasibility study will be complete by August this year while the EIA is scheduled for completion in May this year.

ZRA is expected to work in consultation with ZESCA in Zambia and Zimbabwe Power Company in Zimbabwe on the project implementation.

Both companies doing the studies have since started their work and the Italian company has proven to be most advanced as they have already indicated how much power is likely to be produced given the advancements in designing and technology.

This is exciting news to Government because hydro-power is cheaper than thermal and certainly many times cheaper than solar.

The proposed hydro-electric scheme is located on the Zambezi River, about 54km downstream of the Victoria Falls, across the boundary between Zambia and Zimbabwe. It involves the construction of a dam and a hydro-power plant on the Zambezi River.

So far the ZRA short-listed six international transaction advisors for the construction of a 1 600 megawatt hydropower plant to the tune of $6 billion at the Batoka Gorge along the Zambezi River near Victoria Falls

If completed, the project would increase generation capacity and reduce reliance on electricity imports and Initial studies have shown that the Batoka hydro scheme would turn Zimbabwe into a regional net exporter of power.

The project would also improve the generation mix which is currently skewed in favour of coal-fired plants. The Batoka hydro concept was conceived in 1972 out of a study instituted by the predecessor of Zambezi River Authority, the Central African Power Corporation.

Last year, Energy and Power Permanent Secretary Patson Mbiriri said it was necessary to review the Batoka power project feasibility study.

Mr Mbiriri said if Government can maximise on particular utilities and get the maximum out of it then of course it will end up with more power in terms of hydro-power.

He said once both studies have been reviewed approaches will now be made and bids will be submitted to the short-listed companies to go through them.

The Batoka hydro scheme is among Zimbabwe’s long-term plans to deal with the prevailing power deficit in the region.

Plans for the project were initially mooted in 1993, but the Zambian government was reluctant because of the outstanding debts which it wanted Zimbabwe to clear first.

However, the Zimbabwe Government agreed to pay off more than $70 million it owes Zambia for the sale of the Central African Power Corporation assets which were jointly owned by the two countries thereby proving green light for the project to take off.

Sino-Zim power deals take off

Sino-Zim power deals take off

Kariba-DamFelex Share and Lloyd Gumbo
Mega power deals sealed by President Mugabe in China last year have taken off, with construction already underway at key projects expected to add 1 500 megawatts to the national grid.

The projects are Kariba South Hydro Power Station (300MW), Hwange Thermal Power Station expansion (600MW) and construction of the Gwayi-Shangani Thermal Power Station (600MW), all scheduled for completion by 2018.

China Exim Bank recently released $80 million advance payment to Sinohydro for the expansion of Kariba South Hydro Power Station.

As a result, manufacturing of turbines and generators for the $533 million project has started in China.

Sinohydro was also contracted to expand Hwange Thermal Power Station at a cost of $1,1 billion.

It is this month mobilising on site to do “pre-commencement works” while Government officials are soon expected to leave for China to finalise funding for the project.

China Africa Sunlight Energy (CASECO), which won the bid to construct the $2 billion Gwayi-Shangani Thermal Power Station, has completed clearance work on site, with actual construction expected to commence in July.

An official at Sinohydro who spoke on condition of anonymity said construction work was now at full throttle following the release of funds by China Exim Bank.

“The project is now at full throttle because the manufacturer has started manufacturing turbines and generators in China after that money was released,” he said.

“We are also using part of the money on the Zimbabwean side to buy some of the material here and set up. We are at the moment working on tunnels excavation and we have already achieved 300 metres for the longest tunnel while the other four tunnels are still under excavation. On the working site, we have about 70 Chinese engineers and about 400 local technicians and labourers.”

The projects are expected to have multiple benefits that encompass job creation in line with the Zimbabwe Agenda for Sustainable Socio Economic Transformation.

Zimbabwe Power Company managing director Engineer Noah Gwariro said the contractor was mobilising on -site to do initial works.

He said a team from the Ministry of Finance and Economic Development and ZPC would soon be dispatched to China to finalise funding.

“The contractor is moving on site this month to have pre-commencement work, that is, things like ground and soils have to be tested. This will lay the foundation for them to do a detailed design lay out.

“We are talking to China Exim Bank and we have provided them with the information they need. If all goes well a team will be in China soon because what is now left is for the Minister of Finance to sign for the loan for that contract.”

CASECO deputy general manager Retired Colonel Charles Mugari said clearance of the concession at Gwayi was complete, paving way for construction of a magazine plant for explosives storage.

“In the meantime, we have doubled our efforts to finalise the financial closure because we have been to ZERA (Zimbabwe Energy Regulatory Authority) where they gave us a rate that we can work with,” said Rtd Col Mugari.

“All things being equal by March this year we should start sinking mine shafts while at the same time hope that by July we can start construction of the power station.

“Our general manager is already in China negotiating with various financial institutions.”

CASECO executive board secretary Mr Isaac Chihuri added that all was on course for the first mega independent power producer to kickstart work on the ground.

“As we speak, parties are negotiating with Sinosure (China Export and Credit Insurance Corporation) to ensure quick financial closure. But Industrial and Commercial Bank of China has already been identified as a major conduit to the financing of the project.

“We will be sending a delegation to China soon to discuss security measures with Sinosure. The power project will commence as soon as financial closure is achieved,” said Mr Chihuri.

The integrated Gwayi-Shangani project will see the company extract coal, construct a 600MW thermal power station and install a power transmission line.

To end the chronic power shortages, Zimbabwe is working on a host of public and private expansion projects, chief among them Kariba and Hwange.

The Sadc region faces serious power shortages between now and 2018 due to lack of investment and implementation of regional power projects.

Zimbabwe generates about 1 300 megawatts against a peak demand of 2 200 MW.

Zesa blames heavy rains for power cuts

Zesa blames heavy rains for power cuts

THE Zimbabwe Electricity Supply Authority (Zesa) has blamed heavy rains that hit most of the country for the latest spate of power outages, saying it has experienced a number of faults due to wet weather.

PRIVILEGE SHOKO/
MELODY CHIMHAU

In a statement yesterday, the power utility said lightning strikes and falling trees were adversely affecting normal power distribution.

“Lightning strikes and falling trees on overhead distribution networks are causing malfunctions of some electrical equipment and water seeping into underground cables is causing short circuiting,” the statement reads.

Zesa warned consumers against attempting to repair electrical faults or interfering with electricity infrastructure, as this might lead to serious injury or electrocution.

“Consumers should contact Zimbabwe Electricity Transmission and Distribution Company personnel to attend to faults and should not interpret all power outages as load-shedding,” the company warned.

Zesa said it was working flat out to fix the faults and restore services at the earliest possible times to minimise inconveniences.

“Some faults may take longer to rectify than is normally the case,” the utility said.

“Inconveniences being caused by the high prevalence rate of faults are sincerely regretted.”

Heavy rains presently being experienced in the country have reportedly claimed lives and caused mayhem, destroying settlements and leaving a trail of destruction. Road infrastructure has been affected, with some roads becoming slippery and access to some areas hampered.

The Meteorological Services Department has forecast heavy rains next week with the ground already saturated and dams overflowing.

Rains are expected to worsen the already bad situation and may cause flash flooding.

More load shedding looms for Sadc

More load shedding looms for Sadc

load sheddingOliver Kazunga and Happiness Zengeni in Victoria Falls
SADC should brace for increased electricity load shedding between now and 2018 due to lack of investment and implementation of regional power projects, an official said yesterday.

Addressing delegates at the Regional Energy Regulators Association for Southern Africa meeting in Victoria Falls yesterday, the Southern African Power Pool Co-ordination Centre manager, Dr Lawrence Musaba, said energy projects were not properly packaged due to a lack of funding.

“Power deficits in Sadc started in 2007 and at the moment we’re commissioning projects that generate 1 100 megawatts yearly while the demand for energy is rising. Before the World Cup in 2010 power demand was 4,6 percent and is now averaging 5 percent.

“Between now and 2018 load shedding in the region will continue due to lack of implementation and delays in implementing other projects in the region,” he said.

“By 2018 all the countries in Sadc need to have an integrated approach to address power constraints in the region.”

This year, Dr Musaba said, the region was expected to commission 2 896MW but with a few weeks before the end of the year the target was likely to be missed.

“Our planned generation for the period 2014-2018 stands at 28 000MW. By 2016, we should be getting out of the deficit if the projects are implemented. There’s need for the region to implement the planned projects . . . ”

SAPP was constituted by 12 Sadc member states although the bloc has 16 countries.

“The region has installed generation capacity of 58 gigawatts and what is available is 51GW,” said Dr Musaba.

He said in terms of transmission the central corridor that includes countries such as the Democratic Republic of Congo, Mozambique , Malawi and Angola needed to be reinforced.

He noted that participation of the private sector in the energy sector through coming up with initiatives such as bankable power purchase agreements and appropriate levels of electricity tariffs, among others, was critical in the region.

He said the process of assigning priority projects and criteria when agreed by SAPP should be implemented by member states.

Demand for power in Southern African has been increasing at an average rate of 3 percent per annum. In the last 10 years demand for power in the SAPP region increased by over 32 percent, equivalent to 13 000MW. Unfortunately, there has been no corresponding investments in generation and transmission infrastructure (11 202MW generation added from 2004 to 2013) resulting in the supply deficit that the region was facing.

The reasons for the deficit include economic growth of more than 5 percent in most of the SADC member countries resulting in unprecedented growth in electricity consumption and demand.

There has also been an increase in demand for base metals resulting in high metal prices on the world market with new mining companies being established in the SADC region in the last few years.

Further, inadequate investments in generation and transmission infrastructure over the last 20 years caused shortage while electrification programmes have partly contributed to the increased consumption and demand.

The challenge of potential power shortage was identified and communicated, but not adequately mitigated.

Batoka to employ locals

Batoka to employ locals

BATOKA hydropower dam project is expected to create employment for about 3 000 people from both Zimbabwe and Zambia.

Ruth Ngwenya
Own Correspondent

Zambezi River Authority (ZRA) chief executive officer Munyaradzi Munondawafa yesterday said construction of Batoka Dam will create long lasting job opportunities for locals near the dam from both countries.

“While companies conducting rafting argue that they are going to provide employment through rafting activities, the building of the Batoka itself is going to provide employment for about 3 000 people,” he said.

“These people will be taken from the locality of the dam and we are talking of something which will last for five years or more probably from August next year.”

The Batoka hydropower project will have a 181 meter high dam wall that will hold back 1 680 million cubic meters of water, covering an area of approximately 26 square kilometres. Munondawafa said the Zimbabwe and Zambian governments gave clearances on development of Batoka.

“Currently we are waiting for update on feasibility studies as well as carrying out of the environment impact assessment,” he explained.

“Previous environment assessments were rejected because they had loopholes.

“A full report is expected by March, after that we go to development of Batoka Dam.”

Munondawafa said the report will also evaluate how much money the project will contribute for the next 50 years to the two countries compared to how much shearwater rafting had contributed in the past 50 years.

“If it is discovered that rafting has not contributed much, then we have to agree on what is required to be done and go on with the project,” he said.

ZRA is a bi-lateral organisation between Zimbabwe and Zambia mandated to manage the Zambezi River and come up with strategies of ensuring that electricity is always available.

“As a bi-lateral organisation, we have to ensure that there is no disruption of electricity supply due to any problems from water,” he said.

“We have to strategically ensure that the water quality and quantity is okay so that we do not drain the lake for the sake of coming up with electricity.”

One of ZRA projects is the upcoming rehabilitation of Kariba Dam complex, which is funded by the Zimbabwe and Zambian governments, with support from European Union, World Bank, African Development Bank and individual European countries like Sweden.

“The issue of funding is almost done,” he said.

“There is strong commitment that we will get the funding and we are expecting that we start the rehabilitation process by May next year. A total of $292 million is needed for the whole rehabilitation process.”

Sable buckles under $123m power bill

Sable buckles under $123m power bill

Ammonium-Nitrate-fertiliserGolden Sibanda Senior Business Reporter
FERTILISER manufacturer Sable Chemicals has accumulated a $123 million bill from the Zimbabwe Electricity Transmission and Distribution Company for unpaid electricity.

The bill constitutes about 10 percent of the total amount consumers owe the power transmission and distribution company, which is now estimated at over $900 million.

Sable Chemicals, based in the Midlands Province town of Kwekwe, consumes huge amounts of electricity, currently translating to average daily consumption of 80 megawatts. Most of the electricity is required to power the firm’s electrolysis plant.

Zimbabwe is only able to generate an average of 1 300MW with 2 200MW required at peak of demand.

Sable’s power bill has continued to grow exponentially since 2009, despite the company enjoying power supplies at a grossly subsidised rate due to Sable’s strategic importance.

The company is Zimbabwe’s sole producer of ammonium nitrate fertiliser.

Sable Chemicals has since dollarisation been getting power supply at 3 cents per kilowatt hour. ZETDC procures the electricity from the Zimbabwe Power Company – power utility Zesa Holdings’ generation unit – at 8 cents per kilowatt hour.

Sources said the company recently had its power supply disconnected over the arrears, but was reconnected to the grid following the intervention of Energy and Power Development Minister Dzikamai Mavhaire, allegedly at the directive of Cabinet.

Sources said Cabinet felt that cutting supplies to Sable Chemicals could affect availability of key agricultural inputs such as ammonium nitrate for the 2014-15 farming season.

Sable Chemicals electrolysis plant is used for the separation of water into oxygen and hydrogen. Hydrogen is a key input in the manufacture of ammonia, an important raw material used by Sable Chemical in the production of nitrogenous fertilizers.

The firm, operating at 40 percent capacity, is importing 30 percent of the ammonia required for nitrogenous fertilizer, with the balance produced at the Kwekwe plant.

“They want to continue getting the power at 3 cents/kWh when ZETDC buys the electricity at 8 cents/kWh; that is not sustainable. ZETDC ends up punishing customers through load shedding to supply a company that is not paying,” a source said.

The source said this affected resource mobilization to maintain the network and settle debts, because unlike the bills accrued by domestic consumers, there was no mechanism to defray part of the debt from periodic prepaid payments for electricity.

Contacted for comment Sable Chemical chief executive Mr Jack Murehwa said “governance dictates that we do not discuss our creditor, debtor situations in the press.”

He said it was “untrue” (that Sable Chemical owed $123 million for unpaid electricity) and also dismissed reports that the firm once had power supply disconnected.

“We were on reduced power for some period in November while discussions were going on between Government, Sable and ZESA on standing power supply arrangements.

Asked what plans were in place to settle of the massive bill, Mr Murehwa said “I am not sure what information you have on the $123 million, but you certainly seem misinformed,” saying governance dictated that such issues must stay clear of the press.

“However, if some of my creditors or debtors choose to discuss such information with you, that is them and I cannot be part of that discourse,” Mr Murehwa said.

Efforts to get official comment from Zesa Holdings also proved fruitless yesterday.

Mr Murehwa said Sable had always receiving support from Government since being founded in 1969 and the terms were agreed the three parties, including ZESA.

Zesa eyes more power imports

Zesa eyes more power imports

Engineer Chifamba

Engineer Chifamba

Business Reporter
ZESA Holdings is in negotiations with an unnamed regional power supplier to import about 250 megawatts while more than $1 billion will be spent on improving generation capacity and infrastructure development.

ZESA has been in a discussions with Hydro Cahora Bassa of Mozambique in which the two companies are expected to tie up a purchase agreement for the supply of 100 megawatts. Mozambique has been exporting 50 megawatts to Zimbabwe on a non-firm contract.

ZESA Holdings chief executive Engineer Josh Chifamba told the Parliamentary Portfolio Committee on Mines and Energy said negotiations are at an advanced stage to secure another power import deal.

“We may be able to get additional power from one of the regional suppliers to the tune of about 250 megawatts and I am saying with caution because we are still to reach an agreement. We are at an advanced stages in terms of discussions on the issue.

“I cannot reveal the identity of the supplier but I am quite sure the deal will be finalised soon,” said Engineer Chifamba.

He said for the year 2015 ZESA will spend money on improving generation capacity and infrastructure development through using internal resources and external sources.

ZESA has already made some headway in its generation development plans. The expansion of the Kariba Power Station by 300MW was in progress, and negotiations to expand Hwange by 600MW were taking place.

Plant rehabilitation and upgrades were also underway where ZESA had begun to upgrade the distribution network and strengthening the grid.

“We are looking at spending $1,047 billion and we made a request to Government for some money and on the $1,047 billion of the funding we will only be able to use our own finances of about $143 million and the remainder, which is about $872 million, will be sourced from external sources,” said Engineer Chifamba.

“We had sought from the fiscus this year to the tune of about $14 million which was to fund ZPC and ZETDC, what was actually allocated this year is $7 million. Of that total requirement we hope to close the gap through sources like the China EximBank and local banks,” he said.

Engineer Chifamba said in the course of 2013, ZESA issued some bonds but the subscription rate was disappointing.

He said IDBZ has, however, issued additional bonds for infrastructure projects at ZESA and there was hope that all the planned projects would soon take off.

“So we are thankful though we may not be getting some funds directly from the fiscus but we are thankful of the guarantee of some of the loans that we are getting,” said Engineer Chifamba.

He said efforts by ZESA to raise funding for Hwange and the Kariba South expansion were already underway and will be expected to come on stream in March 2018.

“We are hopeful that after signing the Hwange contract which is $1,5 billion contract, ZPC will have funds and we have set the challenge to ourselves to be able to do the project in six months. Right now we have three to fourth months to go before that can happen.”

He said the company’s smart meter initiative was improving its credit rating and more banks had begun to show interest in lending money to the power utility.

He said ZESA’s thrust is to restore investment credit rating and prepaid meters had provided a very good platform for that.

“ZESA has had to rely on its own resources as well as borrowing, but as we all know our financial market is not performing very well to sustain our financial requirements,” said Engineer Chifamba.

Hwange to get second power station

Hwange to get second power station

HARARE – An independent power producer, Co-Ash Resources has applied to set up a 1,000 megawatt thermal and gas-fired power station in Hwange, the Zimbabwe Energy Regulatory Authority (Zera) has said.

According to the energy regulator, the firm will generate power using waste coal from mining companies in the area using the plasma fired gasification technology.

Zimbabwe-Energy-Regulatory-Authority-(Zera)

Zimbabwe-Energy-Regulatory-Authority-(Zera)

Plasma gasification technology, which involves conversion of organic matter into electricity, is a globally accepted form of waste management which is already being used in developed countries such as the United Kingdom and France to generate power.

“The name of the generation station would be Hwange-CAR Advanced Plasma Waste Gasification power plant,” Zera said in a statement.

“The proposed plant will generate electricity using waste coal fines in the Hwange Colliery environs, Matabeleland North, Zimbabwe.”

Zera said the new power station’s generation method would help clean up “the now hazardous heavily mined environment whilst generating and supplying electricity in Zimbabwe.”

With Zimbabwe battling an energy shortage as demand continues to outrun supply, Zera has licensed over 15 IPPs to complement struggling power utility, Zesa Holdings, amid calls to license more private power generators.

Zesa is currently generating about half of the 2,200MW national requirement which has resulted in permanent load shedding being introduced for both households and industry impacting negatively on economic recovery efforts.

Energy minister Dzikamai Mavhaire recently encouraged IPPs to apply for licenses as government has opened up the sector to end Zesa’s monopoly in power generation.

Energy minister Dzikamai Mavhaire

Energy minister Dzikamai Mavhaire

“We have opened the sector, anyone who has the resource to set up the power generating plant should come on board and get licensed,” he said.

Zimbabwe Faces Black Christmas

Zimbabwe Faces Black Christmas

17 Nov 2014

fire-black-wallpaperZIMBABWE will experience more power cuts in December due to maintenance being carried out at Kariba South power station, a Zimbabwe Power Company official said.

Acting Kariba Power Station general manager Charles Bhebhe said Unit 6 will be shut down for six weeks from December 8, taking 125 megawatts off the national grid. “We will be shutting down Unit six at the beginning of December for upgrading,” Bhebhe said during a tour of the power station. So far, the refurbishment of other five units was completed with the last one being completed in October. On the expansion of Kariba South, drilling of six access tunnels is underway. As at beginning of this week 318 people, of which 83 are Chinese, have been employed on the project and at peak 700 will be employed.”

The $354 million upgrade of the Kariba South power plant would boost output to 1,050 megawatts from the current 750MWand will be financed through a loan from China Exim Bank, which will provide 90 percent with ZPC and its affiliates paying the remainder.

Addressing the same event, energy secretary Patson Mbiriri said the government had fulfilled its end of the bargain, suggesting ZPC had secured its share of the bill. “In terms of funding, we have given the project the priority,” said Mbiriri.

He also said there was need for strict supervision by ZPC and to undertake procurement audits to ensure that equipment meets requirements. - The Source

MoZiSa transmission line to boost power trading in Sadc

MoZiSa transmission line to boost power trading in Sadc

via MoZiSa transmission line to boost power trading in Sadc | The Herald October 23, 2014

Construction of a new power transmission line linking Mozambique, South Africa and Zimbabwe is expected to improve connectivity and electricity trading in Southern Africa.
Commonly referred to as the Mozambique-Zimbabwe-South Africa (MoZiSa) Transmission Project, the venture involves the three countries who are all linked to the regional grid.

All the power utilities in mainland SADC, with the exception of Angola, Malawi and the United Republic of Tanzania, are interconnected through the Southern African Power Pool (SAPP), allowing them to sell electricity to one another through a competitive market.

In this regard, the MoZiSa transmission project has the capacity to improve access to power through the regional grid, allowing the smooth transfer of electricity between and among SADC member states.

According to SAPP, the MoZiSa project is being supported by the respective utilities of the three countries, namely Electricicade de Moçambique (EDM), Eskom of South Africa and the Zimbabwe Electricity Supply Authority (ZESA).

The three utilities have since entered into a memorandum of understanding to develop the interconnector and have formed three joint project development teams. The joint teams — a steering committee, technical committee and commercial committee — have been tasked with spearheading the implementation process, which will be coordinated by SAPP.

SAPP is a regional body that coordinates the planning, generation, transmission and marketing of electricity in southern Africa on behalf of member state utilities.

Southern Africa considers the development of transmission lines as critical to addressing the energy deficit situation in the region, which dates back to 2007 when SADC ran out of excess electricity generation capacity and many regional transmission lines were becoming congested.

As such, the MoZiSa interconnector will complement other regional transmission lines and facilitate power transfers within the SAPP network.

Furthermore, it will increase stability in the power pool through additional interconnection between the strong network in the South and the weak network in the North of the region, which has been a source of SAPP grid instability.

As part of the MoZiSa project, there will be various separate developments to complement the project to ensure that the MoZiSa interconnector is a success.

For example, in Zimbabwe there will be a new substation at Triangle and another one at Orange Grove. Between Zimbabwe and South Africa, the Triangle-Nzhelele interconnector will be built with a 400kv line that stretches 275 kilometres. A new 400kV line bay at Nzhelele substation is also expected to be constructed. Other major developments are being proposed between Zimbabwe and Mozambique.

For example, a 185km-long 400kV line will be developed interconnecting Orange Grove in Zimbabwe to the Inchope Interconnector in Mozambique.

Furthermore, a new 400/220kV Inchope substation in Mozambique will be established, while a 360km long 400kV Inchope-Matambo line and a 400kV that stretches 115km will be constructed at Matambo-Songo.

SAPP has since received funding from the Project Preparation Feasibility Study Fund (PPFS) to be used to carry out a scoping study for the preparation of the MoZiSa transmission project.

The PPFS is jointly funded by the Development Bank of Southern Africa and Agence Française de Développement.
A call for consulting services was made in August to carry out a scoping and conceptualisation study that includes reviewing the initial technical studies and work already done by the three utilities and advise on the technical work on the proposed transmission lines. The work will focus on assessing the high level the risks inherent in the project at various stages of development. “These preparatory activities would enable the project sponsors and SAPP and funders to take the necessary and informed decisions regarding funding for the Bankable Feasibility Study of the projects,” reads part of the terms of reference for the consulting services for scoping study for the MoZiSa transmission project. The expressions of interest for the consulting services closed on 10 September, and SAPP is expected to announce the winning candidates soon.

The announcement will be an important step towards commencement of the implementation of the MoZiSa transmission project. — sardc.net

ZPC Generation Status 20 October 2014

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‘Power shortages to continue till 2018′

‘Power shortages to continue till 2018′

via ‘Power shortages to continue till 2018′ – DailyNews Live 13 October 2014 by John Kachembere

HARARE – Energy minister Dzikamai Mavhaire said the country must brace itself for power cuts until 2018, when most of the current power projects would be completed.

Mavhaire said although the government identified power generation as a key enabler and driver in its quest to revive the economy, loadshedding will only ease after four years.

“It is a great thing for our countrymen, even in far-flung provinces and districts to have reliable and uninterrupted power supply, to have confidence in our power sector and to be able to go about their day to day activities with limited risks of loss of revenue from their business due to interrupted power supplies,” he said during the signing ceremony signed of $1,5 billion deal between Zimbabwe and  China’s Sino Hydro to expand a coal-fired power plant.

Zimbabwe is currently battling acute and frequent power shortages due to lack of investments in the sector. The country produces an average of 1 200 megawatts (MW) against a peak demand of 2 200 MW resulting in load-shedding.

In the past few months, the country’s sole power utility – Zesa Holdings — has increased loadshedding, forcing some parts of the country to go without electricity for up to 18 hours per day.

Under the new deal to expand Hwange Thermal Power station, which still needs full financial cover, Sino Hydro will add 600MW of electricity to the national grid.

“The additional electricity will narrow the demand-supply gap in a huge way,” said Mavhaire.

Zimbabwe recently awarded the tender for the expansion of Hwange Thermal Power Station to Sino Hydro after another Chinese company, China Machinery and Engineering Company (CMEC), failed to provide a funding plan to get the project off the ground, 14 months after winning the bid.

CMEC tendered its bid at $1,38 billion while Sino Hydro Corporation’s bid price was $1,17 billion.

The power station, the country’s largest coal-fired power plant, is currently using six units and the expansion would see the thermal power station adding two more units, which would have a combined generation capacity of 600 megawatts (MW).

China’s Export-Import Bank will provide a loan for the project, 80 percent of it at concessionary rates and 20 percent at commercial rates.

Wang Xinhuai, the Sino Hydro’s vice-president for Africa, whose company is currently undertaking a similar expansion project at Kariba Power Station pledged to execute the contract strictly and deliver the project with high quality.

Zesa exports power amid blackouts

Zesa exports power amid blackouts

October 3, 2014 

THE Zimbabwe Electricity Supply Authority, through its subsidiary Zimbabwe Power Company (ZPC), has increased the amount of electricity it is exporting to Namibian power utility Nampower amid local blackouts.

Owen Gagare

This is partly designed to fund the Kariba South Extension Project whose cost has ballooned from the initial US$355 million to US$533 million under suspicious circumstances.

The increased exports have exacerbated load-shedding countrywide, leading to a public outcry. Zimbabwe has a peak electricity demand of 2 200 megawatts but as of yesterday Zesa was producing 1 080MW.

The Zimbabwe Independent understands ZPC is exporting 150 megawatts to Nampower as part of an arrangement from a 2009 loan agreement where Zesa borrowed US$40 million. The power utility is also selling about 100MW to Nampower as part of efforts to raise money for the increased costs of the Kariba South project, which was officially launched by President Robert Mugabe last month.

The Kariba South Extension Project deal, which will add 300MW to the national grid when complete in 2017, was clinched during the inclusive government era when Elton Mangoma was Energy and Power Development minister, while his MDC-T Renewal Team counterpart Tendai Biti was Finance minister.

Mangoma and Biti have publicly stated that there was no justification for the escalation of project costs, suggesting that corrupt government officials where pocketing the US$178 million difference.

Mangoma said the original agreement was that ZPC would fund 15% of the project, with the Chinese meeting 85% of the costs. but while the Chinese loan has remained constant, ZPC costs have escalated, forcing the authority to raise funds to bridge the gap.

The Chinese have availed a US$320-million loan for the project while ZPC is weighing in with US$213 million borrowed from financial institutions.

Deputy Energy minister Munacho Mutezo has justified the cost escalation arguing the initial costs just factored in the engineering, procurement and construction, but did not take into account full project costs.

Besides the electricity being exported, ZPC is also seeking to reach a deal with big companies where it will guarantee them uninterrupted power supply in return for cash in advance.

“ZPC will be selling about 80MW to the larger companies and the application has been done in accordance with the Electricity Act (Chapter 13:19) of 2002,” said an official.

While the development would be good news to industry, which has been negatively affected by persistent load-shedding resulting in production going down or production costs increasing, the development will also increase power cuts in residential areas.

Zesa spokesman Fullard Gwasira had not by yesterday responded to written questions sent to him on Tuesday despite promising to do so. He was not picking up his mobile phone on Wednesday and yesterday.

However, Zesa public relations department released a statement to all mainstream newspapers on Wednesday confirming the increase in load-shedding, but did not mention the power exports.

“This has been due to a series of power system disturbances which resulted in forced generator outages and equipment failure, particularly at Hwange Power Station,” it said.

Zesa said the situation had been compounded by reduced imports from Hidroelectrica De CahoraBassa of Mozambique which is supplying the Zimbabwe Electricity Transmission and Distribution Company with 50MW, although previously the power utility said it could get up to 400MW.

In addition, Zesa said Kariba South generator number 5 came out of service on August 28 and would only be up tomorrow, while 80MW was being channelled to wheat farmers.

“Intermittent trips have been experienced on generators 4 and 6 from September 13, 2014, with the latest trip occurring on Sunday September 28 2014, with the unit still to return. The impact of this outage is the unavailability of 150MW from the grid,” Zesa said.

 

Zesa load-shedding to continue

Zesa load-shedding to continue

Bulawayo Bureau

The Herald

2 October 2014

ZESA Holdings has warned that its intensified load-shedding will last at least another three weeks, blaming reduced imports and depressed power generation at Hwange and Kariba.The power utility yesterday gave several reasons for failing to meet the nation’s power needs, including prioritising winter wheat farming and Mozambique’s decision to reduce power supplies to Zimbabwe.

 

Since Zesa began its heavy load-shedding schedule last month, some households are going for up to 16 hours without power daily.

 

Zesa spokesperson Mr Fullard Gwasira said Kariba South Generator Number 5 which was undergoing some maintenance work was scheduled to return to service on September 25, but the unit was still out.

 

“The power supply situation is expected to remain subdued for the next three weeks, after which there will be an improvement as maintenance works will have been completed,” said Mr Gwasira.

 

He added that the unreliability of Generators 4 and 6 at Hwange Power Station have contributed to the intensity of load shedding and the impact of this outage is 150 megawatts from the grid.

 

Mr Gwasira said since last month, more electricity was being channelled to the agriculture sector, but load shedding was restricted to non-wheat farmers and domestic consumers.

 

“After widespread consultations with agricultural stakeholders, a strategic decision in the national interest was taken from September 10, 2014, to support the winter crop, which was now experiencing severe moisture stress and required a final round of irrigation.

 

“A total of 80MW is being channelled to the wheat crop sector,” said Mr Gwasira.

 

Mr Gwasira also said the country’s primary source of power imports, Hidroelectrica de Cahora Bassa (HCB) in Mozambique, now supplies ZETDC with 50 megawatts, down from 400 megawatts.

 

This, he said, was owing to demand for electricity at coal fields in Mozambique’s Tete which has peaked significantly.

 

Mr Gwasira said the power utility was working towards improving the current situation and urged customers to use electricity wisely.

 

“The power utility apologies to its valued customers for the inconvenience this has caused and is doing its best to address the current challenges to improve the power supply situation.

 

“During these difficult times, customers can assist by using power very sparingly,” said Mr Gwasira.

Chinese firms partner govt in 1 200MW power station

Chinese firms partner govt in 1 200MW power station

September 18, 2014 

THREE Chinese firms have partnered government for the construction of 1 200 megawatts (MW) thermal power station, a move that would ease the country’s power shortages.

BUSINESS REPORTER

Shanghai Electric, Shenergy Co. Ltd and Niang Jiang Group will team up with the ministry of Energy and Power Development to set up a power station in an investment worth $5 billion.

The investment includes power generation and coal mining.

Jonathan Kadzura, Niang Jiang Southern Africa chairman said on Monday the investment was meant to address the power deficit and also export in the region.

“In Zimbabwe we have an acute shortage of power. It does not end within Zimbabwean borders, but throughout Africa,” he said.

“The country is looking for people who assist with local investments.”

Kadzura said the venture would use the abundant coal resources to generate electricity which can be exported to other countries. He said it was more expensive to export the coal than electricity.

“By the time we build the project to 1 200MW plus at least
$5 billion would have been invested in coal mining and power generation,” he said.

Zheng Jianhua president Shanghai Electric said the parties want to operate a power station in Zimbabwe.

The three Chinese firms will mobilise financial resources to build the power station. The deal does not mean that the country would be borrowing to finance the project, principal project advisor Nyasha Makuvise said.

“We are not borrowing as a country, but making sure that people come in and invest,” he said.

He said the investments would usher in a number of exports initiatives.

Shanghai Electric is a multinational power generation and electrical equipment manufacturing company headquartered in Shanghai, China.

Shenergy Company Limited is engaged in the investment, construction, operation, and management of power, and oil and gas projects. It has 18 electric power projects in various power fields, such as thermal power, gas power, hydropower, and nuclear power.

Niang Jiang has mining and industrial operations in Zimbabwe.
The country is grappling a power crisis as output is far outstripped by demand.

The country generates an average of 1 200MW daily at a time when demand can peak to 2 200MW.

Expansions work at Kariba and Hwange power stations have commenced and would be completed in 42 months.

When completed, the expansions would result in 900MW being added onto the grid.

 

Hwange fault triggers massive load-shedding

Hwange fault triggers massive load-shedding

 

September 12, 2014 in NewsDay

 

Power utility Zesa yesterday said the power outages experienced in most parts of the country were due to technical fault at Hwange Power Station.

 

Winstone Antonio

Own Correspondent

Zesa spokesman Fullard Gwasira said technicians were working round the clock to rectify the problem.

 

“We lost generation due to external system disturbance which then tripped generation of power at the station,” Gwasira said.

 

“We are expecting a phased restoration starting tonight (yesterday) and the second by tomorrow (today) and as a result of this we are no longer adhering to the load-shedding schedule.”

 

Zesa Holdings is currently in the eye of storm over increased and unscheduled load-shedding caused mainly by obsolete infrastructure.

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