Deka project set to kick-start this month

June 24, 2021

RYAN CHIGOCHE

Work on the rehabilitation of the Deka pumping station and construction of a new 42km pipeline to Hwange Power Station, is set to kick-start this month, the Zimbabwe Power Company (ZPC) has said.

Hwange Power Station, the country’s largest coal-fired power plant, draws raw water for electricity generation and cooling from the Zambezi River.

Hwange Power Station

An Indian consortium, Afcons-Vijeta Joint Venture, in January this year, won the tender to refurbish the station, which has over the years deteriorated, giving rise to poor water supplies to the Hwange Power Station and the Zimbabwe National Water Authority treatment plant.

The new pipeline, which will draw raw water from the Zambezi River into Hwange Power Station will augment the existing one and will also supply drinking water for the surrounding Ingagula community in Hwange.

 “Project commencement is expected in the second quarter of the year upon fulfilment of conditions precedent. The deal will solve the perennial water supply problem at Hwange Power Station,” ZPC said.

The Export Import Bank of India (Exim Bank) is the financier of the project. 

The Government of India availed US$29m funding for the Deka project in 2013.

But, the project did not take off due to numerous teething problems.

Initially, the tender to undertake the project had been given to an Indian contractor, Angelique.

However, the Exim Bank cancelled the tender in 2018 after Angelique failed to comply with the agreement.

Angelique wanted to implement the project in two phases rather than one, initially agreed by the governments of Zimbabwe and India.

The plan by Angelique would have seen the cost of the project ballooning by US$11m to US$39.6m from US$28.6m.

The rise in costs resulted in the Indian bank rejecting the proposal by Angelique because it differed from the original plan agreed by the two governments five years earlier.

Exim Bank engaged an Indian firm called Mahindra to carry out an independent assessment of the costs of implementing the Deka project.

An independent assessment report compiled by Mahindra, however, revealed that the expected cost to complete the project was now US$48.1m, creating a funding shortfall of US$19.5m from the initially agreed US$28.6m line of credit facility extended by the Exim Bank of India in 2013 at the behest of the Government of India.

This represents a 68.18% increase.

The government of India has since agreed to avail the funding gap amounting to US$19.5m.

Hwange Power Station currently requires about 3 500m³ of raw water per hour for power generation which may increase to about 6 000m³/hr when its two expansion units are in operation.

Sino Hydro is expanding Hwange Power Station, constructing two more units, which will feed into the national grid with a combined 600 megawatts.

Currently, the expansion project is about 92% complete.

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