Zimbabwe's state power utility on Thursday signed a $400 million deal with China's Sinohydro to expand its Kariba hydroelectric plant by 300 megawatts in a bid to ease the country's electricity shortage.
The southern African country's ageing plants generate around 1,000 MW, half of its peak demand, a power supply deficit which has paralysed mines and industry.
Zimbabwe Power Company managing director Noah Gwariro said the expansion of the Kariba south hydroelectric plant, which currently has the capacity to produce 750 MW, would start in 2013 and take four years.
Export-Import Bank of China will finance up to 85 percent of the project cost, while the rest of the funding would be sourced from local banks and regional development financiers, according to ZPC documents.
Sinohydro is currently developing a 360 MW power plant in Zambia, expanding the Kariba north bank power station on the border with Zimbabwe.
Zimbabwe has also short-listed bids for the expansion of its 920 MW Hwange thermal station for an additional 600 MW.
Independent power producers with projects that have the potential to generate a total of 5,000 MW have been licensed but are yet to start work.
Analysts say Zimbabwe is unlikely to attract significant foreign investment due to President Robert Mugabe's drive to force foreign firms, including mines and banks, to turn over 51 percent shareholding to locals under an empowerment law.
Source :businessdayonline.com
