Independent power producer, Uhuru Energy has struck a 25-year lease agreement with the National Railways of Zimbabwe which will see the energy producer commence preliminary works at its 310 megawatt (MW) solar photovoltaic project in Bulawayo.
This comes after the firm secured about $51 million from a Chinese State-Owned firm for the phase one of this $300 million project.
Under the project, Uhuru Energy will set up combined solar photovoltaic power plants with a total capacity of 310MW as the firm promises to cushion Government from importing power from the region.
Phase one of the project which will be set up in Donnington West in Bulawayo will cost $60 million while phases 2 to 4 will cost $240 million.
The Chinese firm which is going to avail 85 percent of the funding for the project will also undertake the construction. The local partners are going to provide 15 percent funding for the solar project.
Uhuru Energy representative Hugh Sibanda confirmed to Business Times that a lease agreement has since been secured with the NRZ for the land where the power plant will be situated.
“We signed a 25-year lease agreement with NRZ, which gave us the green light to start preliminary works of the project which includes Environmental Impact Assessment. We got letters of approval from NRZ,” Sibanda said.
He said the energy firm has also managed to secure an operating licence after successfully managing to pay for the required fees.
Construction of phase one of the project will take up 18 months to complete. About 400 direct and indirect jobs will be created during the phase one of the project.
Uhuru Energy also seeks prescribed asset status for the project to engage pension funds and insurance firms for investment that will allow for the creation of additional value for its portfolios.
Once completed, Uhuru Energy will be the largest Solar PV power undertaking in Zimbabwe and Sub-Saharan Africa. The company is looking at exporting power once phase one is completed.
Uhuru Energy says the plant will save government from importing power at the same time losing foreign currency. Zimbabwe currently imports 300MW from South African power producer, Eskom.