Indian financier unlocks US$310m loan for Hwange

PHILLIMON MHLANGA

The Export Import Bank (Exim Bank) of India has approved a US$310m loan facility to finance the extension of lifespan of Hwange Power Station, to ensure efficient electricity generation capacity.

Hwange Power Station, which is Zimbabwe’s largest coal-fired power plant with an installed capacity of 920MW, has outlived its lifespan of 25 years, meaning there is need to carry out extensive life extension works on the six units.

The six units were commissioned between 1983 and 1987.

The power station has been experiencing constant breakdowns. And due to the deterioration, Hwange Power Station has only been able to generate less than 300MW daily from the expected 920MW. This week, the plant has been generating slightly above 200MW.

Although the project, according to the Zimbabwe Power Company (ZPC), a power generation unit of ZESA Holdings, requires about US$450m, the Government of Zimbabwe, last year applied for a US$310m credit line from the Government of India.

President Emmerson Mnangagwa confirmed the outcome of that funding application saying Exim Bank will now at the behest of the Government of India, release the US$310m to Zimbabwe for the rehabilitation of Hwange Power Station, which he said would commence soon.

“Following the approval of a US$310m facility from India Exim Bank, work to extend the lifespan of the Power Station is expected to commence in earnest,” Mnangagwa said.

The refurbishment of the power plant is expected to extend the lifespan of Hwange Power Station by 20-25 years.

The project is expected to take five years to complete and entails the adoption of plasma ignition combustion technology.

Energy experts say plasma technology uses a plasmatron to increase efficiency of power generation and reduce the use of large quantities of diesel.

It will, experts said, ignite pulverised fuel which is ground coal, directly to minimise the diesel usage for boiler start up and flame stabilisation processes.

 The refurbishment of the Hwange Power Station comes at a time when ZPC is on course to expand the power plant through construction of Units 7 and 8 which will add 600MW to the national grid.

Currently, construction works are at 61% complete, according to President Mnangagwa.

Upon completion, the country’s largest coal-fired power plant, which has an installed capacity of 920MW, will add two power generators – unit 7 and 8 -with a combined output of 600MW.

The US$1.5bn project is being undertaken by a Chinese contractor, Sino Hydro Corporation. It is believed that upon completion, the project will see the plant’s installed capacity improving to 1 520MW from 920MW.

Exim Bank, which is also the financier of the repowering project at Bulawayo Power Station, will avail about  US$87m line, is currently assessing a tender bid submitted by an Indian contractor, which is vying to upgrade the 74-year-old Bulawayo Power Station.

The US$87m loan has 13-year tenure, a grace period of three years and a repayment period of 10 years at two percent interest rate per annum.

The rehabilitation of the power plant will entail the installation of new technology including CFBC boilers and auxiliaries. 

Cooling towers will also be refurbished to extend their life by between 15 to 20 years.

After completion, the coal-fired thermal power plant is expected to play an immense contribution in the provision of electricity in the country.

Currently, the Bulawayo Power Station has a capacity to generate about 90MW.

The plant, however, is producing an average of 20 megawatts daily due to old age. The re-powering is expected to boost power generation capacity at the plant.

This will improve efficiency and reliability and will be able to generate more than 90MW.

Apart from financing the Hwange and Bulawayo power projects, Exim Bank is also financing Deka pumping and water intake systems in Zimbabwe.

Exim Bank will avail about US$48.1m, for the Deka project.

Initially, Exim Bank had availed US$28.6m for the project in 2013 but costs have ballooned to US$48.1m, according to the latest independent assessment done by another Indian firm, Mahindra.

In January this year, an Indian firm, Afcons Infrastructure Limited, in partnership with Vijeta Projects and Infrastructures Limited, won the tender to rehabilitate the Deka Pump Station and for the construction of a new 42km pipeline to augment the existing  one  to draw raw water from the Zambezi River into Hwange Power Station for cooling and electricity generation.

The proposed pipeline will also supply drinking water for the surrounding Ingagula community in Hwange.

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