Investment opportunities in the Power Sector

26 billion tonnes of coal reserves are available for power generation translating to 8 000 years of use at the current consumption of 3 million tonnes per annum. In that regard there is still room for more power generation capacity to be enhanced by foreign investor participation. Currently there is only one power utility in Zimbabwe, which creates opportunities for either direct investment (as IPPs) in the sector or joint venture participation with the utility ZESA.

The potential in Zimbabwe is 5 000MW on the Zambezi River some of which is shared with Zambia. In addition, an estimated 40 trillion cubic feet of coal bed methane gas reserves needs to be utilized. Zimbabwe through its System Development Plan (SDP) has shown that it has adequate resources required for the development of Power generation plants necessary for both internal and export markets. However, the challenges include among others, securing of finance and also lead times involved to implement the projects in order to meet growing electricity demand.

The priority projects are detailed below:

Expansion of Hwange Power Station

The development of Hwange 7 and 8 generation project with a capacity of 600MW and estimated cost of US$600 million will be implemented by ZESA and a suitable investor through a BOOT arrangement that also includes a Joint Venture in coal mining between ZESA and the investor.However, the Hwange Power Station expansion project will be realised through investment into coal mining. In turn, the proceeds from the coal mining venture would unlock the further financing of the expansion project.

Expansion of Kariba South Power Station

Currently Kariba South Power Station is producing 750MW against an installed capacity of 750MW with all 6 units operational, furthermore, Kariba has a total potential for an additional 300MW for the Zimbabwean side. The main objective of this project is to increase capacity at Kariba South Hydro Power Station (Zimbabwean side) by 300MW. Feasibility studies are in place and the lead time for this project is 4 years from financial closure the estimated total cost for the project is around US$214 million.

Gokwe North Power Station Project

This is a Green field coal fired power station with a potential for 1 400 MW. Gokwe North Power Station, though it will contribute to internal demand consumption, it will be suitable for the export market within SAPP. Feasibility studies are in place and the lead time for this project is 4 years from financial closure the estimated total cost for the project is around US$1.4 billion.

Batoka Gorge Hydro Power Project

This is a Green field Hydro powered station project with a potential capacity of 1600MW for both the Zimbabwean and Zambian sides. Feasibility studies have been completed and the project lead time is about 7-8 years from financial closure with an estimated total cost of US$2.5 billion.

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