12 July 2014, Harare – The Zimbabwe government has taken a big step towards implementation of the Kariba South Hydro Power Station expansion project by setting up a company to take ownership of the plant’s assets, the Financial Gazette’s Companies & Markets (C&M) has established. The formation of a new firm, called Kariba Hydro Power Company, was one of the few outstanding conditions, out of 17 set by the financier of the project, China Export and Import Bank (China Eximbank) for it to release funds for the expansion programme.
Energy and Power Development Deputy Minister, Munacho Mutezo (pictured), told C&M that the company would be responsible for the implementation of the Kariba South Hydro Power Station expansion project, which is expected to take about three and a half years. “We have already created a new entity, the Kariba Hydro Company, which is a vehicle responsible for the implementation of the Kariba South Hydro Power Station expansion project,” Mutezo told C&M on the sidelines of the recent Zimbabwe National Chamber of Commerce annual congress in Victoria Falls.
“Government has done its bit but we want that (Kariba South Hydro Power Station expansion) project to be self contained and be able to service its debt over 20-25 years. It’s important that this project is undertaken as quickly as possible. If we can’t meet (electricity) demand when the industry is currently operating at about 35 percent capacity, what will happen when industry’s capacity goes to more than 50 percent? By 2018 we should be able to have enough power which we should be exporting.”
Energy and Power Development Minister, Dzikamai Mavhaire also confirmed the development. “Yes the company (Kariba Hydro Company) has been established,” Mavhaire told C&M after the launch of the Sakunda Fuel and Loyalty smart cards in Harare. “I am sure that you are aware that we have also appointed a board of directors led by James Chiuta Dube for that company. We are excited that they are ready to implement the project.”
According to the provisions of the multi-million dollar agreement signed last year between Zimbabwe Power Company (ZPC), a subsidiary of State-owned ZESA Holdings, and China Eximbank, the new company would ring fence revenues until it cleared its expansion loan amounting to US$319,5 million. The government and China Eximbank signed a US$355 million loan agreement for the expansion of the Kariba South Hydro Power Station.
– Financial Gazette