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Hwange power station

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Hwange power station is a coal-fired power plant (and the biggest power plant in Zimbabwe) with an installed capacity of 920 megawatts (MW) in Matabeleland North Province, Zimbabwe. Due to deterioration the plant is only capable of generating 327 MW. A rehabilitation package has been funded. In addition, two new units adding 670 MW have been proposed.

Location

The undated satellite photo below shows the existing Hwange power station, near Hwange, Hwange District, Matabeleland North Province.

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Background

Hwange power station was built in two stages and consists of 4 units of 120 MW each and 2 units of 220 MW each. Construction of Stage 1 commenced in 1973, but was suspended in 1975 due to economic sanctions imposed on Rhodesia. The 4 x 120MW units were commissioned between 1983 and 1986 and the 2 x 220MW were commissioned in 1986 and 1987. It is owned by the national electricity company Zimbabwe Electricity Supply Authority, also known as ZESA Holdings, and operated by Zesa's energy unit Zimbabwe Power Company.[1]

Water is sourced from the Zambezi River, and coal from the nearby Wankie colliery open cast mine. About 250,000 tonnes of coal are stockpiled on site.[1]

In 2009, Namibia's NamPower made agreements to help ZESA to revive four units at the aging power station in exchange for power deliveries.[2]

Rehabilitation of existing facility

In May 2017 Standard Bank Group said that it had finalized a US$120 million debt package with ZPC to rehabilitate existing power generator infrastructure at Kariba South Hdro and Hwange Thermal Power Station. The deal aimed at easing Zimbabwe's long-standing power generation deficiency, which provides around 1,000 MW against average demand of 1,400 MW or more. Currently Zimbabwe imports electricity from Mozambique and South Africa; however, acute cash shortages have led to a US$43 million debt with South Africa's Eskom, which now is threatening to curtail the 300 MW of capacity that it is providing to ZESA if the debt is not cleared by the end of May. Currently, Hwange power station is only producing 327 MW out of an installed capacity of 920 MW.[3]

In September 2018, it was reported that the Government of India was set to provide a line of credit of US$310 million to Zimbabwe to enhance the lifecycle of the Hwange thermal plant.[4]

Description of expansion

A project aimed at adding two generation units to Hwange Power Station, known as Phase III, was to be launched in 2000 but stalled due to lack of funds.[5]

The project was later revived. Zimbabwe Power Company, the power generation unit of State-owned power utility Zesa Holdings, plans to expand the power station by 600 MW. The Environmental Impact Assessment (EIA) has been approved. Plans again stalled after the Chinese contractor who won the right to undertake the project, China Machinery Engineering Company, failed to secure funding within eight months. Expansion requires US$1.3 billion to $2 billion. Zesa is seeking other bidders to construct the plant.[6]

In September 2014 Zimbabwe Power Company announced it had finalized negotiations with Chinese contractor Sino Hydro Corporation for the expansion of Hwange Power Station.[7] (Sino Hydro is also doing feasibility studies for the proposed 600 MW Hwange Makomo power station sponsored by Makomo Resources.[8]) The expansion was granted a generation license in January 2015.[9]

Construction is planned to start in 2016, with a planned start date by 2019.[10]

In August 2016 it was reported that financing was planned for completion by end-2016.[11]

In July 2017 Chinapower signed an engineering, procurement and construction (EPC) contract with Zimbabwe for expanding the power station. In November 2017 China’s state-owned Dongfang Electric Corp signed a contract with ChinaPower to supply three major engines for two 335 MW coal-fired power units at the plant.[12]

The groundbreaking ceremony of the project is expected to be held in mid-June 2018, following the release of China Export–Import Bank funds for the project.[13]

In July 2018 a groundbreaking ceremony was held for the expansion. It is planned for commissioning in 2022.[14] In December 2018 the Zimbabwe Power Company (ZPC) said it intended to recruit more than 100 workers on a fixed term contract of up to 36 months for the project.[15]

Financing

In May 2015 Zimbabwe officials said they expected to achieve financial closure for the Hwange expansion project by the end of the year. The total cost for the project is estimated at US$1.4 billion. The China Export Import Bank (Eximbank) is expected to bankroll the project at nearly US$1.2 billion, while the Zimbabwe Power Company (ZPC) will fund the remaining $0.2 billion.[16] In December 2015 China agreed to provide a US$1.2 billion loan to add 600MW of generating capacity to the Hwange station.[17]

In December 2015 it was reported that China will provide a US$1.2 billion loan to rehabilitate and expand Zimbabwe’s coal-fired Hwange power plant.[18]

In December 2016, the Zimbabwean government approved a US$1 billion loan facility from China Exim Bank. The loan would be paid back over 20 years with a grace period of seven years and an interest rate of 2% per annum. The contract for the expansion has been awarded to Sino-Hydro Corporation Ltd. The special purpose vehicle created for overseeing project development is named the Hwange Electricity Supply Company (HESCo), owned by ZPC and Sino-Hydro. In January 2017, ZPC managing director Noah Gwariro said that the company "expects financial closure for the Hwange expansion project by the end of March 2017."[19]

In January 2018, Zimbabwe Power Company said it had raised its equity contribution from Standard Bank South Africa (US$40 million) and Afreximbank (US$76 million). Sinohydro said China Eximbank should now be ready to disperse funds from a US$998 million loan for the plant.[20]

In June 2018 Zimbabwe concluded the loan agreement with the Export–Import Bank of China.[21]

Details of Phase III (Units 7-8) expansion

  • Sponsor: Zimbabwe Power Company
  • Parent company: ZESA Holdings
  • Location: Hwange, Hwange District, Matabeleland North Province, Zimbabwe
  • Coordinates: -18.3835, 26.47 (exact)
  • Status: Construction
  • Capacity: 670 MW (Units 7-8: 335 MW)
  • Type: Subcritical
  • Projected in service: 2022
  • Coal Type: Bituminous
  • Coal Source: Domestic (Makomo Resources)
  • Source of financing: China Export Import Bank (US$998 million), Standard Bank South Africa (US$40 million), Afreximbank (US$76 million)

Articles and resources

References

  1. 1.0 1.1 "Hwange Power Station," Zimbabwe Power Company website, accessed Feb 2014.
  2. "Botswana, Namibia to ramp up Zim power generation," Engineering News, March 21, 2010.
  3. "South African bank concludes $120 million package for Zesa," Chronicle, 16 May 2017
  4. "India to provide $310m for Zimbabwe’s Hwange thermal plant," Power technology, Nov 5, 2018
  5. "Electrical Power in Zimbabwe - Overview," MBendi, accessed Feb 2014.
  6. "Funding stalls power project," The Herald, Jan 9, 2014.
  7. "Hwange expansion contract negotiations complete," The Financial Gazette, Sep 18, 2014
  8. "Makomo Resources in feasibility studies for thermal power station in Hwange," Sunday News Reporter, Feb 15, 2015
  9. "Hwange gets power generation license," Chronicle, Jan 14, 2015
  10. "Hwange thermal station expansion on course," The Chronicle, March 26, 2015
  11. "$1,5bn Hwange power plant project gets rolling," cfuzim, August 2, 2016
  12. "China's Dongfang Electric, Power Construction Corp sign deal for Zimbabwe plant," Reuters, Nov 15, 2017
  13. "China releases funding for Zimbabwe's largest power station expansion project," Xinhua Net, 2018-06-01
  14. "Hwange Power Station strategic," The Sunday Mail, July 1, 2018
  15. "ZESA To Recruit 100 Workers For Hwange Thermal Power Station Expansion Project," Pindula News, December 3, 2018
  16. "US$1,4 Bn Funding For Hwange Power Station," The Financial Gazette, May 28, 2015
  17. Zimbabwe: China promises $1.2bn loan for Hwange thermal power plant upgrade ESI Africa, Dec 2, 2015
  18. Godfrey Marawanyika and Chengetai Zvauya, "China Commits $1.2 Billion to Zimbabwe Power Plant as Xi Visits," Bloomberg, December 1, 2015
  19. "Zimbabwe Hwange Power Station Expansion Makes Headways," ESI Africa, 11 January 2017
  20. "Zesa raises $116m for Hwange Thermal Power Station," The Herald, Jan 26, 2018
  21. "Zim gets $1bn Chinese loan for power generation," Fin24, Jun 02 2018

Related SourceWatch articles

External articles

Wikipedia also has an article on Hwange power station. This article may use content from the Wikipedia article under the terms of the GFDL.