Commercial Farmers Union of Zimbabwe

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ZESA

Sustainable power generation mix viable

Editorial Comment: Sustainable power generation mix viable

Zesa, once it committed itself to Kariba South Extension, is now in a position to explore a lot of other options in both generation methods, including solar and in managing a daily generation cycle that allows it to push output in peak periods and cut back in slack times without huge investments in storage.

So Kariba South Extension allows Zesa to push for the 100MW solar station in Gwanda. Solar generation is becoming even cheaper, with the least-cost tender of $173 million accepted for the Gwanda plant, that is $1,73 a watt.

The Government through its full support behind that scheme, giving not only a guarantee, but now also listing it as a prescribed asset, which makes it attractive to pension and insurance funds.

The biggest advantage for solar stations is that the fuel is free, sunlight falling on earth, so operating costs are very low and the cost of recovering the capital investment being the main expense.

This is much the same as with hydro-schemes where the water is free, but the cost of dams, civil engineering and the turbine and generator sets is high.

The biggest disadvantage of solar is that the sun does not shine at night and output is reduced in cloudy and rainy weather.

Zimbabwe has chosen Gwanda, one of the driest and sunniest parts of the country, to site the station, so the only real problem is the lack of night generation.

But this is not a serious problem considering the generating mix that Zesa will have when the Gwanda plant comes on stream. The extensions at Kariba do not add to the energy output of the power station over a year. That is limited by the flow of the Zambezi River and only occasionally, such as when there are a sequence of years with higher than average rainfall in the catchment can there be a temporary increase in the water ration for the station.

But what the extensions do allow is for Zesa to meet a demand cycle. The extensions made sense looking at pure Kariba output, giving Zesa the option of running eight generators at peak demand and say two at 1am.

But they make even more sense as other stations are added to the mix. And one of these is Gwanda.

Gwanda will generate during the day and generate more between the early morning and evening peaks than it does at the peaks. But Zesa can store Gwanda energy by cutting back at Kariba when necessary and then putting in extra generation during the dark.

In effect, Lake Kariba can store Gwanda energy, but only with the extension to the power station allowing Zesa to vary output.

Gwanda will also allow Zesa to get valuable data on just how solar generation variability during the day and during the seasons affects its mix and start getting an idea of the maximum percentage of Zimbabwe’s generating capacity can be solar, even taking into account that Lake Kariba can function as the largest storage battery in the world.

Boosting the percentage of Zimbabwean generation from green renewable sources, such as hydro and solar, makes environmental sense since even developing countries need to think how they can reduce carbon emissions while boosting development and standards of living.

But they also make economic sense, since they are fuel free. Once built and paid for their output is remarkably low.

But it also requires some thought and the creation of an intelligent mix.

Last year a serious regional drought cut Kariba output, but if there had already been a solar station on line the drought would probably have boosted its output, just as a first-class rainy season will probably cut solar out, but boost hydro output.

Zesa is now taking the first steps in creating an intelligent mix of capacity, reducing the chances of simultaneous problems. It deserves to be backed.

Cabinet boost for power projects

Cabinet boost for power projects
Minister Chinamasa

Minister Chinamasa

Golden Sibanda Senior Business Reporter
CABINET, through the Ministry of Finance and Economic Development, has accorded prescribed asset status to financial instruments that have been designed to raise project funding on the domestic market for the Gwanda solar and Gairezi hydro power projects.

The State Procurement Board awarded the national projects last year after a competitive tender process won by lowest bidders to specification.

Funding raised from the local market will constitute only 15 percent of the project owners’ equity contribution while the balance of 85 percent will be sourced by the contractors from export credit agencies.

In terms of the Gwanda project, China Export and Import Bank will lead the process to raise the vendor financing while African Export and Import Bank will headline the process raise funding for Gairezi.

The 100-megawatt Gwanda solar project requires about $173 million, as per the engineering, procurement and construction contract for the project while $110 million is needed for 30MW Gairezi.

The two projects are being executed by the Zimbabwe Power Company, as part of a number of initiatives the company is undertaking to address the issue of acute shortage of power in the country.

A series of other private and public sector led projects are at various stages of implementation as part of national efforts to close the power deficit with demand at 1 400 megawatts against supply of 1 100MW.

Finance and Economic Development Minister Patrick Chinamasa confirmed yesterday that Cabinet, through his ministry, had granted prescribed asset status to the bonds meant to raise funding for the projects to facilitate investment by pension funds and insurance firms.

He said granting prescribed asset status on the energy bonds will incentivise pension funds and insurance firm to take up equity in the projects.

“I confirm that I have granted prescribed asset status to the two projects. This is to facilitate investment into the projects by insurance companies and pension funds. Both projects require equity capital of 15 percent.

“This will assist and promote pension funds and insurance firms to invest in the projects,” the minister said.

The bonds will have liquid asset status and scheduled to be listed on the Zimbabwe Stock Exchange’s debt market. The bonds also have Government guarantee. In its application for liquid asset status, ZPC said the bonds will help mitigate supply side constraints in the power sector.

Further, ZESA Holdings’ power generation unit said the liquid asset status of the two energy bonds will enable the participation of pension funds in the development of key energy infrastructure in Zimbabwe.

Initiatives to address the energy deficit are in line with medium term policy, Zim-Asset targets, which aims for energy self-sufficiency beyond 2018.

Minister Chinamasa has since written to the Pension and Insurance Commission instructing it to facilitate investment into the hydro and solar bonds.

Conferring liquid asset status on a financial instrument is a regulatory requirement for insurance and pension funds to hold a minimum of 10 percent in the asset.

Government has resorted to prescribing liquid asset status on financial instruments such as bonds to support development of infrastructure, part of the rationale being that such assets have tax benefits.

Given that pension funds hold more than $2,7 billion in funds under management, market watchers hope that the attractive energy bonds will be strongly subscribed in line with their long term liability status.

ZPC’s Gwanda solar project is backed by billion dollar asset firm, Shanghai Stock Exchange listed CHiNT Electric Co. Ltd and its technical partner while State owned Bharat Heavy Equipment Limited of India is the original equipment manufacturer for the Gairezi project.

From day of financial closure, it will take three years to complete the Gairezi hydro power project and 18 months for the Gwanda solar plant.

The two projects will go a long way in mitigating power shortage in Zimbabwe where only 40 percent of households have access to power. About 78 percent of urban dwellers have electricity compared to 16 percent in rural areas.

$294m Kariba contract signed

$294m Kariba contract signed
Kariba Dam

Kariba Dam

Conrad Mwanawashe recently in Kariba
Zimbabwe and it’s northern neighbour, Zambia and co-operating partners represented by the European Union yesterday signed a $294 million contract for the rehabilitation of the Kariba Dam Plunge Pool.

This signals the start of works on the dam wall with the contractor, Razel-BEC, expected on site in the coming weeks.

The project will be carried out under the auspices of the Zambezi River Authority, a bi-national organisation managing the Zambezi River on behalf of the governments of Zimbabwe and Zambia.

The rehabilitation contract includes reshaping of the plunge pool and protection of its fault zone using reinforced concrete mattress and refurbishment of the spillway to improve the operation and reduce the risk of the upstream spillway control facility.

Reshaping the plunge pool will lead to an increase in efficiency and an improved capacity to dissipate the energy generated by the spilling events — those moments when the spill gates are opened to release water.

Addressing delegates at the signing ceremony at the Kariba Dam Wall yesterday, Finance and Economic Development Minister Patrick Chinamasa said the reshaping of the plunge pool will support stabilisation and prevent further scouring of the pool.

“This reshaping is necessary in order to avert a potential risk as the continuous widening of the plunge pool will rob it of it’s ability to disperse the energy jets of water from the open flood gates when spilling,” Minister Chinamasa said.

Conceptualisation of Kariba Dam Rehabilitation Project dates back as far as 2009 when the ZRA Council of Ministers at its 28th meeting approved the mobilisation of funds for the rehabilitation.

Following approval, between 2009 and 2012, ZRA, on behalf of the two neighbouring governments, engaged Engineering Consultants Tractebel Engineering of France, who executed studies and investigations, aimed at designing solutions to rectify the identified safety concerns which lead to two remedial measures included in the $294 million contract being prescribed.

Financing for the project is made up of loans and grants for co-operating partners represented by the EU who include the African Development Bank, EU, Swedish government and the World Bank. ZRA will contribute a total of $19,2 million as corner funding.

The AfDB will contribute $36 million grant and $39 million loan, the EU — a grant of $100 million, the Swedish government — $20 million and the WB — $75 million.

In a keynote address at the signing ceremony, Zambian Minister of Finance Felix Mutati said the development marked a great milestone in the energy sector in both countries.

“With today’s signing may I also assure the public with regard to the integrity of Kariba Dam that it is not an immediate threat,” Minister Mutati said.

While acknowledging the support received from the co-operating partners, Minister Mutati called on them to support the proposed Batoka Gorge Hydro Electric Scheme that has potential to generate 2 400MW of electricity.

“As was the case for the rehabilitation of Kariba Dam, we call upon our co-operating partners to be practical and take a regional approach to this programme as it is meant to benefit countries beyond the two countries (Zimbabwe and Zambia). We will within this quarter be hosting a conference where we will share all the information that partners and financiers need to make the necessary decisions for the project,” said Minister Mutati.

Furthermore, the minister said the development of grid-based solutions will not be the full solutions.

“Therefore the development of mini-hydros and stand-alone solar solutions will be cardinal. We therefore call upon developers and financiers to take advantage of this potential that exists in the region.

“As a way of facilitating these projects, we also need to ensure that countries in the region embark on policy reforms related to tariffs by ensuring cost reflectivity while protecting the marginalised to avoid exacerbating high poverty levels.

“Reform at cost structures of the different utility companies will also be cardinal to ensure that they are profit making and not being subsidised by consumers,” he said.

Power tariff increase: Zesa has other options

Power tariff increase: Zesa has other options
Samuel Undenge

Samuel Undenge

Tafara Shumba Correspondent
Energy and Power Development Minister Dr Samuel Undenge dropped a bombshell when he told Senate recently that he was contemplating hiking power tariffs. Dr Undenge’s proposal to hike electricity charges comes after the Zimbabwe Energy Regulatory Authority (ZERA) rejected a similar proposal from the Zimbabwe Electricity Transmission and Distribution Company (ZETDC). ZERA’s argument for the rejection holds water, one of which is the need to complement Government efforts of reducing the cost of doing business.

Indeed, utilities such as electricity — its cost and availability — are some of the key factors that investors consider before investing in a country.

Zimbabwe is seriously in need of investment, thus ZESA must strive to make its products cheaper than those in the region so as to attract the much sought after investment. ZERA’s rejection is informed by the consultations they undertook. The Confederation of Zimbabwe Industries (CZI), Chamber of Mines of Zimbabwe, Zimbabwe Farmers Union (ZFU), Commercial Farmers Union (CFU) and other business organisations argued that the increase of electricity tariffs would come at a huge cost to the economy. Agreed, but these organisations must also make sure they are unfailingly paying for the electricity they consume including settling their arrears.

The power utility company must not hike tariffs just to match the regional average of 14c/KWh, which seems to be one of its arguments. They must understand that the economies they are operating in are different. It is the current performance of the economy that also spurred ZERA to block the hike. While 14c/kWh might not have any bearing in a performing economy, it will definitely come at a huge cost to the Zimbabwean economy. Electricity is a key economic driver whose increase has ripple effects on the political and socio-economic lives of the people and industry.

The production of everything requires electricity, thus its increase will subsequently spur the increase of commodities and services. It’s unfortunate that the manufacturers will pass on the burden to the final consumer, who is already grappling to make ends meet. The poor consumer is already struggling to meet other financial obligations. What if every utility and service provider hikes their tariffs and prices? It’s unfortunate that the captive consumer has become a victim of managers who lack ingenuity and refuse to think outside the box. ZESA has many options that can be explored to raise the money needed to cover the import cost of 300 and 40 megawatts of electricity from South Africa and Mozambique respectively.

ZESA is owed over a billion dollars, which if recovered, can go a long way in funding various energy generation projects that were mulled years back, but have not yet kicked off. ZESA knows its debtors, so it must be brave enough to face them before burdening the already laden poor consumers.

These debtors must be placed on pre-paid meter system so that the debt can be recovered through their 50 percent debt recovery plan that the power utility put in place.

With this arrangement, ZESA will be assured of its dues since it will collect from the purchased electricity. In fact, every consumer must be put on prepaid system to assure 100 percent collection of revenue.

Unfortunately, the debt recovery plan is restricted to domestic consumers whose collective debt is a diminutive fraction of the billion dollar grand debt. The bigger chunk of the debt lies on the farms. Hopefully, Dr Undenge himself is clean on that.

He is on record saying there was no going back on tariff increases and he is determined to increase it as he says “there is nothing for free”. He might have a point, but consumers still have mistrust in him after he directed ZESA’s subsidiaries, Zimbabwe Power Company (ZPC) and ZETDC to engage Psychology Maziwisa and Oscar Pambuka’s company for public relations campaign when ZESA has a full-fledged public relations unit. Such misplaced priorities force people to resist the hike.

Even the lifestyles of ZESA executives and employees are not commensurate with an entity that is extending a begging bowl to poor consumers. ZESA is one of the few companies that are still paying ridiculously high salaries. Someone on work-related attachment at ZESA is paid far more than a skilled civil servant.

Such profligacy be-gets mistrust in ZESA. The parastatal must adjust its wage bill in line with the macro-economic environment it is operating in.

Zesa power station catches fire

Zesa power station catches fire
Mpopoma substation.

Mpopoma substation.

Nqobile Tshili, Chronicle Correspondent
A ZESA power substation in Bulawayo’s Mpopoma suburb caught fire yesterday causing power outages in some parts of the city.

Two electricity transformers were destroyed in the inferno, an official said.

Zesa Southern Region general manager Engineer Lovemore Chinaka said they were investigating the matter.

“It’s too early, people are yet to go to the scene and establish what happened,” said Eng Chinaka.

Bulawayo City Council’s fire and ambulance department assisted to put out the inferno.

Acting Bulawayo chief fire officer Mr Edward Phiri said the fire started when Zesa technicians were working at the site.

“They were working when a short circuit occurred resulting in two transformers in the substation catching fire. The substation has 16 transformers all together. “Fortunately no one was injured in the process,” said Mr Phiri.

He said the emergency department was conducting its own investigations on the cause of the fire.

“They may have said the fire was caused by a short circuit in the transformers but we need to do our investigations that give us satisfaction on the matter,” Mr Phiri said.

Some parts of the city experienced power outages following the fire incident that occurred at around 12PM.

@nqotshili

Power crisis: Three stations not operational

Power crisis: Three stations not operational
Hwange thermal power station

Hwange thermal power station

Bianca Mlilo, Business Reporter
ONLY two out of Zimbabwe’s five power stations were operational yesterday with Kariba Hydro-Power Station producing the highest output at 703MW while Hwange Thermal Power Station recorded its lowest — at 185MW.

According to the Zimbabwe Power Company (ZPC) daily generation update, the country’s three thermal stations, Munyati, Bulawayo and Harare were not generating any electricity at all.

In total, Hwange and Kariba generated 888MW against national demand of between 1800MW to 2000MW.

It could not be established why the three thermal stations were not operational as company officials were not available for comment with Energy and Power development Ministry secretary Mr Patson Mbiriri also saying he was on leave.

Hwange Power Station, which has an installed capacity of 920MW, has been dogged by technical faults due to ageing equipment and this has seen its output plummeting.

It has also emerged that zero output at the three thermals could be linked to low coal supplies due to poor production at Hwange Colliery Company Limited. Makomo Resources, which is the major supplier at the moment, is being owed in excess of $25 million by the power utility.

HCCL’s coal output has dropped to a record 36 000 tonnes per month from a peak of about 300 000 tonnes, a trend management blames on severe working capital constraints.

Meanwhile, Makomo Resources is producing between 60 000 and 70 000 tonnes of coal per month against a monthly projection of 200 000 tonnes.

Makomo Resources executive director Mr Raymond Mutokonyi said delays in payments by ZPC were adversely affecting production.

“ZPC owes us in excess of $25 million and their non-payment means we are not able to service our equipment on time. This then means we are not able to meet our production targets,” said Mr Mutokonyi.

He said the three power stations (Bulawayo, Harare and Munyati) had been facing challenges for a while now, but he was more concerned about Hwange power station.

The station, he said, was consuming more than they could supply, dipping into its reserve stocks and would likely run out of coal soon because its suppliers were unable to meet its coal demand.

“Hwange power station is consuming 3 000-4 000 tonnes per day and since we are unable to supply them adequately, they are dipping into their existing stockpiles,” said Mr Mutokonyi.

ZPC managing director Engineer Mr Noah Gwariro could also not be reached for comment as his mobile phone was not reachable. Efforts to get a comment from Zesa Holdings chief executive officer Engineer Josh Chifamba and the power utility’s spokesperson Mr Fullard Gwasira were also not successful as their mobile phones were not being answered.

Zimbabwe now relies on regional power imports to meet its domestic consumption.

@BiancaMlilo

Tokwe-Mukorsi 15MW hydro power plant project underway

Tokwe-Mukorsi 15MW hydro power plant project underway
Workmen work on a plunge pool at Tokwe-Murkosi Dam

Workmen work on a plunge pool at Tokwe-Murkosi Dam

Walter Mswazie recently in Chivi
WORK is underway to install a $20 million mini-hydro power plant producing 15MW at the recently completed Tokwe-Mukorsi Dam in Chivi District.

The project is expected to augment power generation in the country as well as attract investment in  Masvingo province.

Major works at the $255 million dam project have been completed and last Friday workers were doing final touches on the plunge pool.

The contractor has already started working on the mini-hydro power plant while some workers were working on the project to bring electricity to the dam from the main grid.

Zimbabwe National Water Authority (ZINWA) site engineer Mr Paul Dengu said major construction work at the dam was complete and that the contractor was left with minor touch ups which are expected to be finished by the end of this week.

Mr Dengu said the next phase will be the generation of electricity.

He said the amount of water in the dam (21,7 percent or 390 million cubic metres as of Thursday last week) was enough for the establishment of a mini-hydro power plant.

“We have finished all the major works at the dam and just waiting for the rains to fill the reservoirs.

“The next phase is the generation of electricity where a 15 megawatt hydro power plant will be established at an estimated cost of $20 million.

“Work is expected to start soon using the contractor’s equipment,” he said.

Apart from electricity, the dam has a capacity to irrigate 26 000 hectares of land which will see Masvingo being turned into a greenbelt.

The dam has a potential to create a number of business opportunities in tourism and hospitality industry, fisheries among other opportunities.

@walterbmswazie2

Zim geyser project stalls

Zim geyser project stalls

Government intends to introduce a new law that makes it illegal to use electric geysers.

Government intends to introduce a new law that makes it illegal to use electric geysers.

GOVERNMENT’s ambitious project to force property owners to stop using electric water geysers and migrate to solar powered geysers as part of efforts to reduce electricity consumption has failed to kick off, the Financial Gazette’s Companies & Markets (C&M) can report.
The project was launched in September 2015, and the expectation was that a law would be swiftly promulgated immediately to make it mandatory for all existing and newly built properties across the country to install solar water heaters (SWH).
In fact, government had threatened to immediately stop all new properties from installing electric geysers and give all properties with the gadgets a few days to replace them with solar geysers.
But this has not happened, 16 months on.
Stephen Dihwa, the principal director in the Ministry of Energy and Power Development, told the Financial Gazette’s Companies & Markets that government was still committed to the project but admitted there were serious challenges.
Dihwa, who is currently the acting permanent secretary, said: “We are still committed to it but there is a lot of work to be done. We are still working on the regulatory draft framework which will pave way for the project. What’s holding the project back is that since it will be mandatory, there must be a clear plan. We are also working on the local authority legislation where we want to revise the existing by-laws to ensure that there will be no building that will be approved without solar powered geysers.
“The other issue is to do with quality control. We want these geysers to be manufactured locally. Therefore, we have engaged the Standards Association of Zimbabwe (SAZ) to work on a series of standards. They should finalise before the end of this first quarter. On the other hand, the Zimbabwe Energy Regulatory Authority has financed the setting up of a laboratory, which will be used to test the equipment.”
It is estimated that about 300 000 electric geysers are currently installed in Zimbabwe and these, according to Samuel Undenge, the Minister of Energy and Power Development, are responsible for 40 percent of average household energy costs.
The project oversight was placed under the Ministry of Energy, with the country’s integrated power generation and distribution company, ZESA Holdings’ unit, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), being the implementing agent.
The rolling out of the project throughout the country would have stimulated the SWH industry.
Several jobs were expected to be created from this venture.
The success of the renewable energy programme is significant not only because it is a major step towards sustainable power, but also because Zimbabwe has an enormous solar energy potential which, if exploited can supply approximately 10 000 gigawatts hours of electrical energy per year.
Zimbabwe is a perfect arena and space for massive solar water heating projects given that the country has access to over 3 000 hours of sunshine per year, meaning that harnessing such a natural source of energy will go a long way in stimulating and sustaining growth in the fragile economy.
Furthermore, diversifying the country’s energy sources would be beneficial for the nation’s energy security. Besides, it would have transformed the energy market.
Analysts said the project could have gone a long way in helping the country save power from the national grid by between 300 megawatts (MW) and 400MW by 2018, which Undenge described as a virtual power plant.
It was also hoped that power saved could be channelled to other productive sectors of the economy as the country is battling to find solutions to its perennial power shortages.
The financing mechanism proposed by Undenge, that is to allow consumers to access geysers on credit and then recover the cost through ZETDC prepaid platform, was always bound to fail.
Perhaps what the ministry needed to understand was that ZESA’s mandate is to produce and distribute power, and its core business is not to save it. To deliver its mandate, it has to make money out of that.
Now, to have ZESA saving power is indicative that the ministry made a wrong move in the first place.
Dihwa defended the move to involve ZESA.
“ZESA will lead the process,” he said.
“Directly, ZESA’s mandate is to deal with the supply side and make money. But indirectly, it’s ZESA’s mandate again to save electricity consumption. Many would think that ZESA’s role is to encourage customers to use more electricity. But, we have realised it is a benefit not only to the consumer but for ZESA to start promoting the demand side management as well. This means that power saved will be directed to the productive sector. ZESA should remain viable by managing some of the demand costs.”
Apart from that, it was always going to be difficult for cash-strapped government to implement the programme, because its purse is almost empty. It is estimated that to install about 250 000 units, Zimbabwe requires about US$200 million, a figure government cannot mobilise.
Dihwa said: “The other problem we have is financing. We have realised that we cannot leave it to households to finance it on their own. That will be unfair. What we have done is that we have set up a committee, which is engaging local banks to finance it. But banks wanted to know how risk will be managed and if there will be a government guarantee of the loans. We, however, said one of the routes should be to link it with the ZETDC prepaid system.”
The Zimbabwe government wanted to copy the project implemented in South Africa, which failed dismally.
The solar water heater programme in South Africa was launched in 2008 and was driven by the department of energy, and managed by South Africa’s power utility Eskom.
This was, however, on a voluntary scheme, unlike the Zimbabwe government’s strategy to make it compulsory for everyone.
The South African project experienced problems and only about 400 000 households and commercial buildings of the targeted one million units were installed in eight years.
Now, Eskom has failed to continue with the project and it has migrated back to the Energy Department, which has since abandoned the project.
Commenting on the failed South African project, Dihwa said: “We are aware of the reasons why it didn’t do so well in South Africa. We have studied the project and we found out that it had to do with the fact that most geysers supplied in South Africa were not working at all and the other issue was to do with the quality of installation.”
Most of Zimbabwe’s power is coming from Hwange Power Station, the country’s largest coal-fired power plant. Kariba South Hydroelectric Power Station, which used to generate about 750MW, is now generating about 285MW after water available for electricity generation in the lake dropped drastically in recent years, affecting power supply in the country.
The country is also struggling to generate enough electricity from its small thermal power stations in Bulawayo, Harare and Munyati because of obsolete equipment at the power plants, meaning the country continues to face increased power shortfalls.
Despite all its problems with local power generation, Zimbabwe has managed to keep lights on in the last 12 months because the country has been importing expensive power from the region.
But it is no longer guaranteed to continue doing so because power utilities from the region have also been having power shortfalls. In fact, the whole Southern African Development Community (SADC) region is currently having a capacity shortfall of about 8 247MW.
This has seen the entire region going through a difficult spell with respect to power supply challenges necessitating load shedding. This means, regional power utilities can only supply Zimbabwe when they have surplus.
Zimbabwe is generating about 1000 megawatts against a power demand of about 1 600MW. To cover for the shortfall, the country is importing about 500MW during peak hours, 350MW from South Africa’s Eskom and 50MW from Hydro Cahora Basa of Mozambique. It is also procuring about 100MW from diesel generators from an independent power producer in Dema.
Electricity is a critical enabler to the development of the economy. This is why government should not be swayed into believing that the importation of electricity is the solution to the country’s power problem, because the swelling import bill is not desirable to the nation.
It is therefore critical for government to ensure the availability of reliable, affordable and sustainable power that addresses the current power shortages as well as meet future demand, which is critical for the ailing economy.
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Kariba power generation up 70 percent

Kariba power generation up 70 percent

LAKE KARIBA
GENERATION capacity at Kariba South Hydroelectric Power Station, Zimbabwe’s main source of electricity, will go up by 70,17 percent, after the Zambezi River Authority (ZRA) reviewed upwards the amount of water it allocates to the plant for power generation.
The plant will be generating 485 megawatts (MW) on average this year from 285MW in the prior year, in what will significantly improve the electricity supply situation in Zimbabwe.
This is for the first time in two years that ZRA, which manages the Zambezi River waters and the use of Lake Kariba on behalf of the governments of Zimbabwe and Zambia, has adjusted upwards the power station’s electricity generation capacity.
ZRA was established in 1987 as a successor to the Central African Power Corporation (CAPCO).
“ZRA has increased our electricity generation capacity from 285MW to 485MW. Of that amount, we are exporting about 80MW to NamPower, Namibia,” said Zimbabwe Power Company (ZPC) acting managing director, Joshua Chirikutsi, confirming the development.
ZPC is a unit of ZESA Holdings, responsible for power generation.
In November last year, ZRA increased water usage for hydropower generation at the dam, from 20 billion cubic meters to 30 billion cubic metres, which ZPC and the Zambia Electricity Supply Authority (ZESCO)’s Kariba North Bank Power Station must share equally.
This means that they would utilise 15 billion cubic metres of water each for power generation during the current year.
At full capacity, Kariba Dam stores about 65 billion cubic metres of water.
ZRA first reduced water allocation to the two power utilities in May 2015, from 45 billion cubic metres to 33 billion cubic metres, citing low water inflows into Kariba Dam during the 2014/15 rain season.
The move resulted in increased load shedding across Zimbabwe and Zambia.
In January 2016, ZRA further cut down water usage to 20 billion cubic metres to ensure that water would be conserved so that generation of electricity could continue to the next rainy season.
This resulted in Kariba South Power Station generating as little as 285MW of electricity, a move which worsened the power supply situation in the country at a time Zimbabwe was battling machine breakdowns at its four thermal power stations.
The current dam water levels is 478,56 metres above sea level compared to 477 metres recorded last year in January. This, however, is still far from the normal.
The Financial Gazette can report that live water storage, which can go up to 10 metres, is currently at about three metres.
Dead water storage is at about 475 metres.
This means that only three metres of water can be used to turn the six turbines at the power station to generate electricity.
Live water storage is used for generating power. When the lake is 100 full, live water should be 35 percent while dead water should be 65 percent.

Daniel Shumba, chairman of the Mines and Energy Parliamentary Portfolio Committee

Daniel Shumba, chairman of the Mines and Energy Parliamentary Portfolio Committee

ZRA, through the rule curve, determines water levels — that is the highest and lowest tolerable level — to which the Kariba dam reservoir may provide firm loads of water for power generation to ZPC and ZESCO, two power utilities which share the water resource for power generation.
The Kariba South Power Station has a capacity to produce 750MW, but has been producing 285MW due to low water levels.
Kariba Power Station was constructed between 1956 and 1960 with an initial generation capacity of about 666MW. But after refurbishment undertaken in 1997 and an up-rating process in 2003, the plant increased its generation capacity to 750MW.
The plant’s general manager, Kenneth Maswera, said: “The station is carrying out several plant refurbishments to maintain generation reliability. The major capital projects are driven by residual life assessments — to prioritise the more critical plant areas ahead of others.”
About US$48 million was set aside for the general refurbishment of the project. New transformers have been installed at the existing plant and governor modernisation has also been completed.
Expansion work at the power station, which is being undertaken by a Chinese contractor Sino Hydro, will result in the construction of two additional units expected to add 150MW of electricity each into the national grid.
The first unit is expected to be completed by December this year and the remaining unit would be commissioned by March next year. This will reduce the need to import expensive power. Zimbabwe is currently importing a combined 400MW of electricity from South Africa’s Eskom and Hydro Cahora Bassa of Mozambique.
The estimated cost of the project is US$533 million. The Export Import Bank of China provided US$319 million towards the project while the balance will be provided by ZPC.
The overall project progress is 71 percent complete. Onsite civil infrastructure which includes the powerhouse is 85 percent complete.
The project also encompasses major underground works requiring excavations. These are access tunnels, headrace and tailrace tunnels and penstocks covering about 3,1 kilometres and the power house and surge chamber covering about 110 000 cubic metres.
There are also surface excavations that include the intake, outfall and transformer platform covering 400 000 cubic metres. Last week Members of Parliament had a tour of the plant.
Daniel Shumba, chairman of the Mines and Energy Parliamentary Portfolio Committee, told the Financial Gazette: “As Parliamentarians, we are now enlightened after this tour of the plant. We are excited about the commitment and professionalism exhibited by ZPC and the contractor, Sino Hydro Corporation.”
It is understood that after completion of the expansion project, the power utility is expected to save about US$78 million annually because Kariba Power Station has been producing the cheapest electricity at US$0,02 per kilowatt hour (kWh). Thermal power stations at Hwange, Bulawayo, Munyati and Harare are producing electricity at between US$0,06 and US$0,08 kWh.
The country is importing electricity from Eskom at a cost of US$0,14 kWh and procuring electricity from HCB and Dema Diesel Power Plant, an independent power producer owned by Sakunda Holdings at US$0,13 kWh and US$0,15 kWh respectively. Expensive imports result in higher blended tariff.
Zimbabwe’s total peak demand is about 1 600Mw but is producing about 1000MW of electricity.
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Big boost for Kariba South project

Big boost for Kariba South project

KARIBA south power stationGolden Sibanda Senior Business Reporter —
POWER utility, Zesa Holdings yesterday took delivery of $7 million worth of key hydro power plant electrical equipment from China in a development that will boost efforts to meet its target for 2017.

Zesa said that the equipment forms part of the biggest components required for capacity extension of Kariba South power Station.

The equipment (three giant transformers) will keep Zesa on track to complete the project on target and within budget, with the first of the two units set to feed 150MW to the grid by December 24, 2017.

Spokesperson for the Zesa Holdings, Fullard Gwasira said yesterday the equipment were step-up transformers, which will boost generator power from 14Kv to 300Kv; equal to what Zesa carries on its transmission lines.

He said “during an era when the country is witnessing industrial degeneration, Zesa is actually investing in equipment which will be with us for the next 30 to 50 years”. The project is funded by China Eximbank, for contractor, Sino Hydro.

The arrival of the electrical equipment will further boost Kariba South extension overall project completion rate, which stood at 71 percent as of last week.

The heavy electrical equipment imported from China and delivered through Durban Port in South, was manufactured by TBEA and weighs about 130 tonnes each.

Officials said other such heavy duty electrical equipment will entail the generator stators, expected around mid this year and each weighing over 430 tonnes.

The equipment was procured by Sino Hydro, the Chinese company which won the tender to extend Kariba South plant’s generation capacity at a cost of $533 million. Sino Hydro won the engineering, procurement and construction contract valued $354 million, which adds up to over half a billion dollars due to development costs.

“We have received delivery of the transformers, three of them and each cost $2,3 million with the combined total is about $7 million,” Mr Gwasira said.

“Each one of them weighs about 130 tonnes and they are being transported from Durban to the power station via a road train; the road train, a pull truck and push truck, signifying the huge weight of the equipment.

“What is import to note is that this is part of Zesa’s fulfilment of the Zim-Asset programme, which is being undertaken through the energy and infrastructure cluster.

“It is also important that this is a culmination of the Sino-Zimbabwe mega deals which were signed by President Mugabe during his State visit in 2015,” he said.

“We are very excited by this development, at the moment Kariba Hydro power expansion project is at 71 percent and with the delivery of this equipment, project completion rate will significantly go up,” Mr Gwasira added.

“The giant transformers are part of the core pieces towards the completion of the project and we are confident that we are on course to meet our own deadlines.”

While Zesa managed to eliminate load shedding due to power shortage last year, it has been under immense pressure to import to bridge the supply deficit. Zimbabwe requires about 1 400MW at peak periods, but is able to generate only about 1 000MW due to old state of power plants, equipment and lack of funding for capital projects, which hamstrung investment for nearly 3 decades.

‘Kariba South expansion on course’

‘Kariba South expansion on course’

KARIBA-SOUTH-POWER-STATIONGolden Sibanda recently in Kariba —
ZESA Holdings says construction works to expand Kariba South Power Station’s generation capacity is on course to meet the December 2017 target with the first unit expected to start pumping 150MW into the national grid by Christmas.

Zimbabwe Power Company’s project manager for the Kariba South Power Station expansion project Engineer Edmond Mukahadira said overall project progress was at 71 percent.

This comes as ZPC has been allocated more water by Zambezi River Authority for power generation this year while the expected normal to above normal rains are projected to result in significant inflows into Lake Kariba.

Eng Mukahadira said this during a tour of the Kariba South Power Station expansion project by members of the Parliamentary Portfolio Committee on Mines and Energy chaired by Daniel Shumba, which expressed satisfaction with the work Zesa has undertaken to resolve power shortages in the country.

The power plant had a design capacity for 750MW, but will have its capacity increased to a combined 1 050MW when units 7 and 8 come on line.

Eng Mukahadira said unit 7 was at an advanced stage and on course to start power generation on December 24 while the second unit will come on line in March next year.

“In terms of overall project progress, we are at 71 percent. The first unit will be commissioned on December 24, 2017 while the second unit will be commissioned on March 10, 2018,” he said.

ZPC chair, Engineer Stanely Kazhanje added that “we are on target and we are happy with the progress to date”.

Eng Mukahadira said that in terms of the ongoing works, there are on-site and offshore works which include civil engineering, manufacture of electro-mechanical and electrical equipment to be used on the project.

“Manufacture of electro-mechanical equipment is now at 62 percent, most of the hydro-mechanical equipment has been delivered while some of it has already been installed, and electrical equipment is at 82 percent.

“A total of 3,1 kilometres of access adits (tunnels) have been excavated,” Eng Mukahadira told legislators.

He said that about 85 percent of the civil works have been completed. It is expected that the project will be completed within the budgeted total cost of $533 million, including development cost to be added to the $354 million cost of the engineering, procurement and construction contract awarded to Sino Hydro.

The coming online of unit 7 coincides with anticipated increase in water inflows into Lake Kariba, which would increase the amount of water available for the purpose of generating electricity.

ZRA, which oversees the Zambezi River, allocated Zimbabwe and Zambia, which share the river, 15 billion cubic metres each from 10 billion cubic metre in 2016. The two countries, which generate power on the northern and southern sides of the Zambezi River, were allocated 10 billion cubic metres each last year, as part of cautious measures taken to avoid depleting the lake, which did not receive significant inflows.

Kariba Dam draws most of its water from Northen Zambia while only two rivers namely Sanyati and Gwayi provide the bulk of 20 percent of the hydrology from Zimbabwe that flows into the lake.

While the lake can rise to levels of 484 metres when filled to capacity, the drought in 2014-2015 saw the lake water levels dropping to record lows and is currently averaging 477 metres.

When the lake is full, the water levels at which the lake can be used to generate power is equal to 35 percent of capacity while the remaining 65 percent is considered “dead water”, as it cannot be used for generating electricity.

“Our highest inflows come in the month of May, June and July and we expect this year the lake may give us a favourable level,” Kenneth Maswera, general manager, Kariba South Power Station, told the lawmakers on Thursday last week.

“This year we’ve been allocated 15 billion cubic metres of water for Kariba South Power Station (from 10 billion for the2016 hydrological year).

“When the lake is full, the dead storage is 65 percent and the live storage, which we use to generate electricity is 35 percent.”

“Last year we got 10 billion cubic metres (of water) allocation (from ZRA).”

Zesa blames rains for power outages

Zesa blames rains for power outages

zesalogo

Andile Tshuma, Chronicle Reporter
THE Zimbabwe Electricity Supply Authority (Zesa) has blamed the latest increase in power outages on heavy rains that are falling across the country almost daily.

In a statement issued yesterday, the power utility said it was experiencing a lot of faults due to the wet weather.

“Zesa Holdings advises its customers countrywide that there is an increase in electric faults due to the prevailing heavy rains that are interfering with the electricity infrastructure,” reads part of the statement.

The power utility said the heavy rains have resulted in an increase in unplanned power outages with faults taking longer to rectify.

Zesa said the public must not equate the power cuts to load shedding.

“Consumers should not interpret outages as load shedding and should not at any time attempt to repair faults as this may lead to electrocution. Affected customers are advised to contact their nearest Customer Service centres for assistance,” said Zesa.

The heavy rains have led to loss of lives and destruction of property in different parts of the country.

In some areas homesteads, schools and clinics have been destroyed.

— @andile_tshuma

4 Sadc countries plan power project: $223m venture to produce 600 megawatts

4 Sadc countries plan power project: $223m venture to produce 600 megawatts

hwange-power-station2

Leonard Ncube, Victoria Falls Reporter
FOUR Sadc countries — Zimbabwe, Zambia, Botswana and Namibia are planning a $223 million power project expected to produce 600 megawatts to feed into the region.

The project is code-named ZIZABONA, an abbreviation derived from the first two letters of the countries involved in the project.

Scores of villagers in Chiefs Shana, Whange and Mvutu areas are set to be relocated to pave way for the power line which will run from Hwange Power Station to Victoria Falls into Zambia.

According to the project’s website, an agreement signed in 2008 compelled all the four countries’ respective power utilities — Zesa, Zambia Electricity Supply Company, Botswana Power Corporation and Namibia Power Company to finance parts of the project that fall within their national boundaries.

About five investors namely the African Development Bank, Development Bank of Southern Africa, European Investment Bank, French Development Agency and Stanbic Botswana have expressed interest in funding the mega project.

The project will be implemented in two phases with an initial capacity of 300MW which will be later increased to 600MW.

The first phase includes construction of a 120-kilometre 330 kV line from Hwange Power Station to Victoria Falls where a switching station will be built on the Zimbabwe side.

The line will extend to a substation in Livingstone, Zambia.

The second phase will involve the construction of a 300-km 330kV line from Livingstone to Katima Mulilo in Namibia, through Pandamatenga in Botswana.

A 330kV interconnector line is envisaged to join the four nations and enable wheeling of power north-south or vice versa via the Caprivi Link.

The project is expected to have capacity to increase power trading among participating utilities, as well as provide an alternative route and help decongest the existing central transmission corridor that presently passes through Zimbabwe.

Zesa and Hwange District Administrator Mr Simon Muleya on Tuesday summoned three chiefs — Shana of Jambezi, Hwange outside Hwange town and acting chief Mvutu near Victoria Falls for sensitisation ahead of consultative meetings.

Mr Muleya, who transferred from Beitbridge recently, said the meeting was meant to update traditional leaders about the project so they can also mobilise their subjects ahead of meetings to be conducted by Zesa officials.

“The project hasn’t started yet and Zesa is sensitising communities who are along the envisaged line between Hwange and Victoria Falls. They will be erecting a new power line next to the existing one and some villagers will be moved.

“Zesa wanted to meet chiefs so that they mobilise their communities and organise meetings on the ground.

“Those affected will be compensated”, said Mr Muleya.

Acting chief Mvutu, Mr Bishop Sibanda said a meeting with villagers in his area was held at Ndlovu Business Centre on Wednesday.

“Some Zesa engineers met the community on Wednesday at Ndlovu Business Centre and promised to start some project in poultry, gardening and irrigation as compensation for people who will be moved and the whole community. They said the power line will come from Hwange via Mispah to Victoria Falls,” he said

— @ncubeleon

New alternator for Harare plant

New alternator for Harare plant

 

Harare-Power-Station1

Harare Power Station

THE Zimbabwe Power Company (ZPC), a power generation unit of ZESA Holdings, has re-commissioned turbo-alternator number 1 (TA1) plant at Harare Power Station, a move expected to result in the plant increasing power generation to 40 megawatts (MW) daily, from around 25MW, the Financial Gazette’s Companies & Markets (C&M)can report.
A turbo-alternator is an electrical generator that converts mechanical energy to electrical energy and is driven by steam turbines.
ZPC’s spokesperson, Fadzai Chisveto, said the station’s turbo-alternator was commissioned at the end of last year. As a result, Harare Power Station is now operating two turbo alternators.
Chitsveto added that plans were underway to have a third boiler mounted, a move which would see the plant increasing its generation capacity to about 60MW, a significant contribution towards curbing the power shortages in the country.
“Harare Power Station’s turbo-alternator returned to service on November 2, 2016, after successful installation and commissioning of the plant. This comes after the long awaited rotor was dispatched from India on July 25, 2016 and delivered to site on the September 23, 2016,” said Chisveto.
She added: “The power station, which is now generating 40MW from TA1, TA2 and two boilers, is expecting another increase in power generation to 60MW, after the third boiler is completed.”
Chisveto also said the power utility had digitalised the turbo-alternator and boilers.
“To ensure that the TA1 is well monitored, Harare Power Station has digitalised its equipment; boilers and turbo-alternators to be specific. (This will ensure that) faults can be detected early and corrective measures put in place on time.”
Plans are also underway to repower Harare Power Station, a process which would see the replacement of existing boilers with new CFBC technology and refurbishment of turbo-alternator plant number 2 and other auxiliaries.
The re-powering project, which will be undertaken by an Indian company called Jaguar Overseas, is expected to extend the plant’s life by about 20 years.
Jaguar Overseas has, however, failed to secure funding for the project, estimated to be US$104 million, more than two years after the Indian contractor won the tender.
It first failed to secure funding from the Export Import Bank of India and is now negotiating with the African Export Import Bank (Afreximbank).
Chisveto told C&M: “Jaguar Overseas is still engaging Afreximbank and there are good prospects that funding for the Harare re-powering project will be secured.”
The Harare Power Station re-powering project also includes the construction of a water pumping station and a raw water pipeline from Lake Chivero to the power station.
ZPC has been engaged in negotiation with the Zimbabwe National Water Authority (ZINWA) for the water supply agreement and it is understood these have been completed.
What’s remaining is the ministerial validation of the water charges and the agreement is expected to be signed upon confirmation of water charges.
Chisveto said: “Negotiations for the water supply agreement between ZINWA and ZPC have been completed. A few issues remain to be ironed out before the contract is signed.
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Power deal bears fruit: Industry injects $5.5 monthly for electricty imports

Power deal bears fruit: Industry injects $5.5 monthly for electricty imports

power lines

Oliver Kazunga, Senior Business Reporter
THE country’s power utility, Zesa, says companies in the manufacturing sector are paying a total of $5,5 million per month for the importation of electricity.

Towards the end of last year, Zesa engaged companies in the manufacturing sector through their representative body, the Confederation of Zimbabwe Industries (CZI), to assist the utility meet its foreign debt payment obligations with a view to avoiding load shedding.

Zesa negotiated for the deal after realising that it was getting inadequate foreign currency allocations from the Reserve Bank of Zimbabwe, receiving $1,5 million weekly out of a demand of $5 million.

According to ZBCtv, the power utility’s chief executive officer Engineer Josh Chifamba reported their deal with industry had started bearing fruit with individuals companies paying close to $5,5 million a month for the power importation.

He, however, said despite local industry support, Zesa was still constrained in meeting the remaining $10 million required monthly.

CZI energy committee chairperson Mr Kurai Macheza told Business Chronicle that the arrangement was a company to company deal.

“I wouldn’t think that Eng Chifamba is lying to say that companies in the manufacturing sector are paying close to $5,5 million per month to Zesa for power imports. As CZI, we have sanctioned our individual members to enter into arrangements with Zesa. However, I wouldn’t know how much the companies are paying to Zesa because the power utility has engaged individual firms,” he told Business Chronicle.

The power utility imports power from South Africa and Mozambique to augment limited power generation within the country to ensure limited load-shedding though the suppliers are owed $55 million.

Zimbabwe’s power generation has been affected by drought in previous years, prompting the Zambezi River Authority to ration water supplies for power generation to the power utility, which is currently generating 285 megawatts from Kariba Power Station out of an installed capacity of 750MW. Of late, there have been challenges in mobilising adequate foreign currency to pay for power imports and ensure continued supply of electricity.

The payment terms according to ZETDC include an accrual of 10 percent interest on the prepayment.

The client, which is industry, would also be required to make a foreign currency prepayment to accounts as instructed by the power utility.

Zimbabwe has been importing about $6,6 million worth of electricity from South Africa’s power utility Eskom to bridge the electricity deficit.

The country owes about $10 million to Mozambique’s Hydro Cabora Bassa while the power utility is owed about $1 billion by domestic and industrial consumers.

@okazunga

Eskom relaxes Zesa power import terms

Eskom relaxes Zesa power import terms

Golden Sibanda, Harare Bureau
SOUTH African power utility, Eskom has relaxed its position regarding earlier demands for Zesa Holdings to pay for power imports in advance.

The power utility imports 50 megawatts from its South African counterpart during peak periods of demand and up to 300MW during off peak periods.

This is because demand for power outstrips supply in Zimbabwe owing to limited generation, with most power plants having lived beyond their lifespan.

It is understood Eskom, although it sometimes faces severe supply deficits, exports power to Zimbabwe to get hard currency at a time the rand is weak.

Eskom demanded that Zesa pays for power imports ahead of supply after the power utility struggled to settle bills for the electricity supplies from South Africa.

As such, Zesa was paying upfront an average of $6,5 million per month to Eskom and broke the monthly bill into weekly instalments due to cash constraints.

Our Harare Bureau understands that Zesa is now making weekly payments of about $1,7 million whenever it has the finances to prepay for the imports.

Zimbabwe’s power utility is facing cash flow challenges due to a sub-economic tariff and a enormous debtor’s book for power already consumed.

Further, Zimbabwean entities have faced serious difficulty in making foreign payments due to depleted nostro account balances on account of low exports.

But secretary for energy, Patson Mbiriri, said in an interview yesterday that Eskom “is not insisting on its pound of flesh” regarding advance payment.

“To the extent that foreign currency is available, we are importing on the basis of prepayment arrangement, but Eskom has not been insisting on its pound of flesh. South Africa is not insisting (upfront payment) on it at every turn,” he said.

Zesa also imports power from regional utilities including Hydro Cahorra Bassa and Lusemfwa of Zambia to cover local supply gaps due to limited capacity.

Zimbabwe requires an average of 1 400MW against local generation of 1 000MW.

Only Kariba South power station can generate power at installed capacity of 750MW, but output is currently regulated due to low lake water levels.

While Hwange Power Station had installed capacity to produce 920MW, it can only manage under 500MW as the station is now old while other units are unit.

The country’s three thermals namely Bulawayo, Munyati and Harare can only produce at a fraction of their design capacity and are also quite aged.
Zesa Holdings recently asked industry to pay for power in advance to enable it to mobilise resources it required to clear arrears for power imports.
The power utility promised uninterrupted power supply to industry, outside of emergencies beyond its control. Shortage of power may however soon be a thing of the past with new projects set to connect to the grid.

Several other public and private sector led power projects are at various stages across the country and these include solar and hydro power initiatives.

Chinamasa mulls power tariff review

Chinamasa mulls power tariff review

Zvamaida Murwira Senior Reporter—

There is need to review current power tariffs upwards to fund several power projects most of which are being financed by multilateral financial institutions from Eastern countries, Finance and Economic Development Patrick Chinamasa, has said.Minister Chinamasa said he would soon distribute a position paper canvassing for support to review such tariffs so that they become more viable and competitive for both producers and consumers.

He said this last week while moving a motion calling for Parliament to ratify a $1 billion loan facility for Hwange power project being financed by China Export and Import Bank.

“Madam Speaker Ma’am, I need to emphasise that it is critical that, as Government, we approve tariffs that are viable both to the producer and the consumer, in order to ensure viability at all levels. We need tariffs that produce a win-win situation for both the producer and the consumer. In this regard, a paper will no doubt be prepared, to see whether we can achieve a viable tariff regime,” said Minister Chinamasa.

The $1 billion project is for the expansion of Hwange 7 and 8 Thermal Power Station and ancillary structures.

Minister Chinamasa said the expansion would increase power generation, reduce supply demand gap and that it was a lower cost alternative compared to other sources of power such as independent power producers and regional imports.

Bulawayo South MP Mr Eddie Cross (MDC-T) queried the logic for proposing a tariff review when Government had already made a commitment to the project with financiers. He said there was need for a study of a viable tariff structure in advance.

Mr Cross raised concern on projects being financed by the supplier given that the country had no control on the actual cost of equipment.

“Sometimes you can have inflation of the cost of the equipment that is being supplied or even inferior equipment. Under the new Public Procurement Act, which is currently going through the House, I just wonder, have the kind of limitations which are in the new Act which I think are excellent; have they been applied to this particular tender? Are the interests of Zimbabwe in terms of the quality of the equipment and the cost of the equipment being protected?” asked Mr Cross.

In response, Minister Chinamasa said it was critical to realise that the only source of capital for infrastructure projects was China.

“Obviously, it is usually at their own terms and we are desperate for this infrastructure. Yes, we try to negotiate but at the end of the day, the People’s Republic of China insists on three things. Any loan that we secure from the People’s Republic of China, the contractor must be Chinese and the equipment must also be manufactured in China,” said Minister Chinamasa.

“What I want to assure Hon Cross is that in terms of quality, I think our safeguard is that the contractor SINO Hydro is an equity partner with us in this company, Hwange Electricity Supply Company (HESCO) because China Exim Bank only grants 85 percent of the loan. It requires the borrower to secure 15 percent. What we did was, of that 15 percent, we gave a percentage to SINO Hydro to bring in as equity and they are going to bring in $176 million. Of course, the balance will be from us,”

A clear and present danger of Kariba Dam collapse

A clear and present danger of Kariba Dam collapse

Several decades on, the much heralded Kariba Dam is in big trouble, even facing possible collapse, with potentially catastrophic consequences.

Daily Maverick

The Kariba Dam wall

The Kariba Dam wall

Zambia and Zimbabwe currently derive the bulk of their electricity supplies from hydroelectric dams on the Zambezi and other rivers in the region.

The drought has resulted in prolonged low water levels in the dams, which has resulted in sustained blackouts in Zambia for upwards of eight hours per day in recent times.

Provided the rains return, electricity supplies should normalise. But a far greater potential danger exists.

The region’s largest hydroelectric dam — Kariba — has developed some extremely serious flaws during its 50-plus years of existence and some observers have even suggested that the dam is in grave danger of collapse, with the attendant catastrophic consequences.

Currently at 18% full, Kariba hit a recent low point of around 12% in January 2016.

The Kariba Dam on the Zambezi, between Zambia and Zimbabwe, was designed and constructed just before and after the end of British colonial rule in Africa.

Designed by Coyne et Bellier of France and constructed by Salini Impreglio of Italy in two main phases between 1956 and 1977, the dam was financed by the World Bank.

This was the heyday of the Zambian Copperbelt activities near Ndola in the north of the country and sustained electrical supply was critical to ensuring the smooth operation of the copper industry.

At the time, Kariba was one of the largest hydroelectric power stations in the world in terms of its power output, though today it doesn’t even come close to being in the top 20.

Serious and unexpected flooding in the Zambezi Valley during 1957 and 1958 led the designer and constructors to deviate from the original plan for the dam insofar as they decided to install six sluice gates rather than three, to accommodate hitherto unheard of water levels.

This action may have inadvertently resulted in serious design flaws that only manifested themselves years later.

The scouring action of the spillways has, over time, resulted in a 90-metre deep “plunge pool” being formed in front of the dam wall.

This canyon is now only about 30 metres away from the dam’s foundations and, if left unchecked, threatens to undermine those very foundations.

The erosion problem was first identified as early as 1962, after only three years of operation.

At that time, the plunge pool was around 30m wide, but by the 1980s it had more than doubled in size.

Since the 1990s, only three of the six floodgates have been allowed to be opened at any point in time, thus limiting the scouring impact of the spillway.

This action appears to have resulted in no further erosion of the plunge pool.

Of course, this is a mixed blessing, as it has meant that average water levels in the dam have required to be kept lower than they otherwise would have been, resulting in lower amounts of electricity generating capacity.

A less pressing problem is that the concrete surrounding the floodgates has swelled over the years, inhibiting the ability of the dam to rid itself of excess water during times of flood.

Of course, this is not a problem at all currently, due to the average dam level of the past two years only being 18%.

The World Bank has organised syndicated funding of almost $300 million to rehabilitate the dam.

This would involve reshaping the floor of the plunge pool so that spillway water no longer splashes back towards the dam wall.

It also involves rebuilding the six sluice gates.

The estimated repair time for the reshaping of the plunge pool is three years, with the sluice repairs taking eight years.

Notwithstanding the very low dam level, work can only be carried out during the dry winter season each year and cumulative delays so far have meant that reshaping contracts were only due to be awarded last month and sluice gate contract work only beginning in June 2017.

The World Bank is very confident that Kariba Dam is not in any danger of collapse, a view that is diametrically opposed by the Institute of Risk Management South Africa (IRMSA) and AON South Africa, which issued a report in 2015 written by IRMSA founder member Kay Darbourn that stated that the dam wall would collapse if urgent repair work wasn’t carried out very quickly.

The report contained the extremely chilling line: “If nothing is done, the dam will collapse in three years”.

So which body is correct — the World Bank or IRMSA? Although The World Bank seems very confident that the wall won’t collapse, there have been suggestions that the body has been only too happy for scaremongering reports along the lines of IRMSA’s to circulate, as this has helped speed up the notoriously slow process of syndicating the loans required for rehabilitation.

But if IRMSA is correct, the consequences could be devastating.

A collapsed Kariba Dam would wreak havoc on human and animal life, as the resulting tsunami tore through the Zambezi Valley.

The force of water would be so great that it would likely also destroy Cahora Bassa Dam in Mozambique, about 480km away.

Under such a doomsday scenario, aside from the loss of animal and human life, electricity production in the southern Africa region would be seriously degraded.

Around 40% of Southern Africa’s electrical generating capacity (ex-SA) would be gone and the industries that depend on this power, such as mining, would be crippled.

South Africa currently relies on Cahora Bassa to deliver 1 500 megawatts of clean power a day and if that were to be switched off, rolling power cuts could resume in that country.

Reconstructing both dams would take up to eight years and during that time, the cumulative misery of the hundreds of thousands of displaced people would be incalculable.

Perhaps, the last word on this subject should be left to the late South African prime minister John Vorster; in a completely different context, he is credited with coining the phrase “consequences too ghastly to contemplate”.

If the World Bank is wrong and Kariba does indeed collapse, the consequences really would be too ghastly to contemplate.

ZRA raises water allocation to Kariba Power Station

ZRA raises water allocation to Kariba Power Station
Lake Kariba dam

Lake Kariba dam

Business Reporter—

THE Zambezi River Authority (ZRA) has provisionally increased water allocation to Kariba South Power Station for next year on expectations of normal to above rains during this rain season.The Zimbabwe Power Company, which draws water from Lake Kariba for power production has been provisionally allocated 15 billion cubic metres of water from the current 10 billion cubic metres this year, the management said in a briefing to the board on Monday.

ZPC is a power generating subsidiary of Zesa Holdings and also runs Hwange Thermal Power Station and three small thermal stations (Harare, Munyati and Bulawayo).

This means KSPS, which has the capacity to produce 750MW will produce an average of 285MW.

Currently, the KSPS is producing an average of 590MW because it is budgeting water by switching off some of the units during off peak period and utilising its allocation during peak periods.

“Zambezi River Authority has provisionally allocated KSPS 15 billion cubic meters and production plan for 2017 (was) budgeted along this water allocation,” said the management.

The hydrological trends have shown that water levels at the lake have been declining from the peak level of around 486 metres in 2014 to 482 metres in 2015 and 481 metres last year.

In 1992, during the year of drought, the lake level peaked last 479 metres.

KSPS produces half of Zimbabwe’s power requirements while two units are being added which will generate additional 300MW.

The expansion is now 65 percent complete with the first unit expected to start electricity generation in the next 12 months.

Power utility engages CZI on load shedding

Power utility engages CZI on load shedding
Mr Clifford Sileya

Mr Clifford Sileya

Bianca Mlilo, Business Reporter
THE Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has engaged industry to assist the power utility meet its foreign debt payment obligations in order to avoid load shedding.

ZETDC, a subsidiary of Zesa Holdings is responsible for the transmission, distribution and retailing of electricity.

According to a letter written to Confederation of Zimbabwe Industries (CZI) members by the CZI chief executive officer Mr Clifford Sileya, ZETDC has already set the terms of the agreement.

“ZETDC has met with CZI over efforts to ensure continued power supply to industry amidst payment challenges being faced. As you may be aware, Zimbabwe is importing a significant amount of its power from South Africa and Mozambique, mainly due to depressed generation from Kariba,” reads part of the letter.

Mr Sileya said there have been challenges in mobilising adequate foreign currency to pay for power imports and ensure continued supply of electricity.

“To avoid losing the power imports, ZETDC has made an appeal to business to assist by entering into arrangement to assist ZESA in meeting its foreign payment obligations in order to avoid a possibility of load shedding.”

The payment terms according to ZETDC include an accrual of 10 percent interest on the prepayment.

The client, which is industry, would also be required to make a foreign currency prepayment to accounts as instructed by the power utility.

“Amount prepaid plus interest to be converted at current tariff to credit energy units. The consumption in excess of the units credited shall be paid by the client to ZETDC at the prevailing tariff.”

“ZETDC shall provide firm and uninterrupted electricity power supply for the duration of this agreement, subject to system faults and emergencies which occur outside of ZETDC’s control,” reads the letter.

Zimbabwe has been importing about $6,6 million worth of electricity from South Africa’s power utility Eskom to bridge the electricity deficit.

The country owes about $10 million to Mozambique’s Hydro Cabora Bassa while the power utility is owed about $1 billion by domestic and industrial consumers.

— @BiancaMlilo

Kariba Dam wall rehabilitation to begin in 2017

Kariba Dam wall rehabilitation to begin in 2017

 
Kariba dam can carry up to 65 billion cubic metres of water.

Kariba dam can carry up to 65 billion cubic metres of water.

 
 
REHABILITATION work on the 55-year-old Kariba Dam is expected to commence  in February 2017, the Financial Gazette’s Companies & Markets (C&M) has learnt.
 

 

Kariba Dam is managed by the Zambezi River Authority (ZRA) on behalf of the governments of Zimbabwe and Zambia and supplies water  for power generation to two hydropower stations with a combined capacity of 1 830 megawatts (MW) of electricity. 
The North bank power station is operated by ZESCO in Zambia and has an installed capacity of I 080 MW. The South bank power station is operated by the Zimbabwe Power Company (ZPC) in Zimbabwe and currently has an installed capacity   of 750 MW. ZPC is however, expanding the power station to add 300 MW to the national grid.
ZRA chief executive officer, Munyaradzi Munodawafa, confirmed that the rehabilitation of the dam wall, which is estimated to cost about US$294 million, will start in February 2017.
The works, which include the re-shaping of the plunge pool to minimise a scouring of the dam’s foundations and the refurbishment of the spillways and associated infrastructure to improve the dam’s stability and operations, are expected to last six years.
Munodawafa told C&M last week: “Tenders for contractors to carry out works on the plunge pool closed last month. Tenders for the sluice gates were opened this month. Without functional sluices, the reservoir level cannot effectively be maintained.”
The rehabilitation project is part of the critical dam maintenance programme which involves geo-technical investigations in order to verify the geo-mechanical characteristics of the rock mass in terms of fracturing, weathering, alteration, hardness, abrasiveness, strength and deformability.
 The plunge pool, which should act as a shock absorber for the dam wall’s foundations and surrounding river banks, is said to be eroding towards the dam wall with the possibility of undercutting the foundation of the wall.
This could damage or compromise the dam wall which could result in a potentially disastrous event for thousands of people living downstream of the Kariba Dam.
The dam wall had been compromised through many years by an erosion of the plunge pool, with the foundations chipped down to depths of up to 90 metres beyond permissible levels.
The erosion had under-cut and destabilised the wall, putting the entire wall structure at high risk of collapse.
The project is being funded by partners who include the World Bank, the African Development Bank, the European Union and the Swedish government, who are helping the governments of Zimbabwe and Zambia.
ZRA will provide US$19,2 million while AfDB and  the European Union will inject US$75 million and US$100 million respectively into the project.
The WB and Swedish government have also expressed interest to support the project. It is understood that the WB will provide US$75 million while the Swedish government will inject US$20 million.
About US$80 million would be used for reshaping and stabilisation of the plunge pool, with the balance being used to rehabilitate the spillway’s upstream hydro-mechanical facility.
Apart from economic losses arising from the destruction of the hydro-power stations, a collapse of the Kariba Dam wall would generate a regional humanitarian crisis arising from flooding in Zimbabwe, Zambia, Malawi and Mozambique.
The dam which has a height of 128 metres, was designed by French engineer and inventor Andre Coyne and was built between 1956 and 1958 by an Italian consortium, Impresit Group.  

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