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Region looks towards Zimbabwe's power plants
IRIN News
March 11, 2008

http://www.irinnews.org/report.aspx?ReportID=77230

Harare - In a move that could alleviate Southern Africa's struggle to cope with the growing demand for electricity, while helping Zimbabwe with its chronic shortage of foreign exchange, neighbouring countries have proposed recapitalising some power stations and coal mining.

South Africa's power utility, Eskom, and Anglo Platinum, a South African mining company, as well as the Botswana Power Company have shown an interest in Zimbabwean thermal power stations located in the capital, Harare, in Bulawayo, the second largest city, and in Munyati, near the town of Kwekwe in Midlands Province.

Anglo Platinum, which has been negatively affected by power outages in its home country, has asked to be allowed to export electricity to South Africa as part of its proposal.

In February, the Southern African Development Community (SADC) taskforce on implementation of power projects held an emergency meeting in Botswana on the state of energy supply in the region, attended by ministers of energy, at which a resolution was adopted to source funding for the energy sector.

The meeting heard that if this resolution were not implemented, development would be stifled, and that the region required US$46.4 billion for long-term development of the energy sector, while US$5 billion was needed to complete current energy projects by 2010.

Tomaz Salamao, SADC executive secretary, was quoted in the media saying: "The current electricity supply demand balance in the SADC region is precarious, as evidenced by the recent frequent recurrence of blackouts and load shedding in virtually all the countries of the SADC mainland as well as Madagascar."

Since the beginning of 2008, South Africa, Namibia and Zimbabwe have been among the countries in the region hit by widespread planned and unplanned outages, affecting every sector of the economy.

Eskom, a major regional supplier, has blamed the blackouts on heavy rain in the coal-producing parts of the country, which it said had affected the quality of coal required for its coal-fired plants, and breakdowns at several of its key generating plants.

Money needed
Ben Rafemoyo, chief executive officer of the Zimbabwe Electricity Supply Authority (ZESA), recently told the Parliamentary Portfolio Committee on Mines, Energy, Environment and Tourism that his organisation needed US$3.8 billion for a complete overhaul of obsolete equipment to generate at least 2,000MW needed to meet national requirements.

"We are in a precarious financial position because our tariffs are very low," said Rafemoyo. The Hwange power station in Matabeleland North Province was producing 280MW, when it could generate 750MW at maximum capacity. Rafemoyo said the Kariba hydropower station on the Zambezi River, on the northern border with Zambia, had a generating capacity of 750MW, but was producing 720MW.

"Other power stations can generate 170MW but are not generating anything because of lack of coal. The older the machines at power stations, the more breakdowns we experience and these are costly to repair."

Zimbabwe generates 1,000MW, against a daily requirement of 1,500MW, and imports 40 percent of its electricity from the Democratic Republic of Congo, Mozambique and South Africa. The country has had to resort to power rationing because of the shortfall, which has affected many industries, homes, schools and hospitals.

Coal shortages
Zimbabwean power stations have also been affected by coal shortages. Energy Minister Mike Nyambuya confirmed that failure to provide enough coal and ageing equipment had affected the country's ability to fulfil its energy requirements.

Although energy shortages were predicted in 1995, nothing was done about the looming problems. "Most of our machinery for energy generation have not been replaced in the last ten years," he said.

Eskom, according to senior officials in the energy industry, was ready to pump up to US$25 million into the Hwange Colliery Company (HCC), Zimbabwe's sole coal producer, to ensure reliable and uninterrupted coal supplies if the proposed takeover of the three thermal stations, with a combined potential of 500MW, was formalised.

Burzil Dube, spokesperson for HCC, told IRIN: "I can not say offhand how much would be needed [to resuscitate the mining company] but, certainly, we would need a huge recapitalisation if we would have to supply enough coal for the power stations."

If the proposal is accepted, 50 percent of the power generated would be consumed locally and the other half exported to South Africa. The Botswana Power Company's proposed plan to supply coal to the two power stations in Bulawayo and Harare would also mean that half the power generated would be exported to Botswana while the rest would be consumed locally.

ZESA Holdings is already in partnership with its Namibian counterpart, NamPower. Under the deal, the Namibian power utility has provided a US$50 million loan for the rehabilitation of the power station at Hwange, the country's largest.

Hwange is operating below capacity because the country does not have enough money replace spare parts. When refurbishments are complete, Namibia is expected to receive 180MW of electricity for five years as part of the power purchasing arrangement.

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