Zimbabwe, China in US$400 m Power Plant Agreement

Harare, May 03, 2010 - Zimbabwe has signed a $400 million agreement with China's Sinohydro to expand its Kariba hydro plant, an official said on Monday, as power cuts threaten to dim the country's economic recovery prospects.

"The government has signed a memorandum of agreement with China's Sinohydro for the expansion of Kariba by an additional two 150 MW units," Noah Gwariro, managing director of the Zimbabwe Power Company, the generation unit of state utility ZESA, told Reuters.

"China's Eximbank will fund the project to the tune of $400 million. Sinohydro is already working on a similar project on the Zambian side of Kariba."

Zimbabwe has previously signed hundreds of millions of dollars in cooperation agreements with foreign governments to boost its electricity generation capacity, but has not made progress in getting any of the projects off the ground.

In earlier remarks during a parliamentary committee hearing on the energy sector, Gwariro said Zimbabwe was currently generating a total of 940 MW from its Hwange thermal plant and Kariba, against peak demand of 2,500 MW.

"We are getting 735 MW from Kariba and 205 MW from Hwange," he said.

"Because of lack of funding, we have two units (out of six) operating at Hwange Power Station, rather than the three which were supposed to be running by now to give us 360 megawatts."

Hwange, which has a 750 MW design capacity, experienced a complete power failure in February and Gwariro said ZESA expects the plant to be generating 560 MW by the end of May. Reuters