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Zimbabwe turns to idle stations for electricity
Brian Latham and Antony Sguazzin, Business Report
February 22, 2008

http://www.busrep.co.za/index.php?fSectionId=&fArticleId=4266909

Harare and Johannesburg - Zesa Holdings, Zimbabwe's state-owned electricity firm, might restart three idled coal-fired power stations if talks with foreign investors were successful, Mike Nyambuya, the energy minister, said yesterday.

"Discussions are under way about the renovation of power stations that are not currently working, and there are some interested parties," he said.

Zimbabwe imports about a third of its electricity from South Africa, Mozambique, Zambia and the Democratic Republic of Congo.

Power shortages in the country sometimes leave industry and homes without electricity for 20 hours a day.

A spokesperson for Zesa, who declined to be identified, said that the Harare thermal power plant, a plant in Bulawayo and Munyati power station in Midlands Province were standing idle.

These plants have a combined capacity of about 500 megawatts, about half that of Zimbabwe's main power station, Hwange.

The state-owned Herald newspaper said electricity might be exported to South Africa and Botswana as part of a potential agreement to restart the power stations.

Eskom might spend as much as $25 million (R190 million) improving coal-fired power plants and coal mines in Zimbabwe, it said, citing government officials.

The newspaper added that Eskom might also use its Bay Harbour investment company to refurbish the plants, and invest in the Hwange Colliery, Zimbabwe's biggest coal mining company, to increase production. State-owned Botswana Power was also bidding to revive the Munyati and Bulawayo plants, the Herald said.

Meanwhile, the Zimbabwean dollar had its biggest one-day decline on the black market, as traders speculated the government was buying the US dollar to finance President Robert Mugabe's re-election campaign.

Takesure Hove, who buys and sells currencies, said: "Demand has suddenly gone through the roof. Perhaps the central bank needs US dollars to finance the election next month, and they're buying it through their people."

Zimbabwe is in its 10th year of economic decline, following Mugabe's 2000 seizure of most white-owned farms for redistribution to black farmers.

Price controls, combined with shortages of basic commodities, have spawned the world's highest inflation rate of 100 580 percent.

Prices of all goods and services, from food to school fees, are controlled by the government, while businesses are not allowed to make a profit of more than 20 percent on goods and services.

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