China partners with Rio Energy to Build $3 Billion Coal Plant in Zimbabwe

Zimbabwe’s Rio Energy Ltd. has commenced plans to build a mammoth 2,100-megawatt thermal power plant in northern Zimbabwe at a projected cost of $3 billion, Rio Energy said Monday. The project is supported by China Gezhouba Group Corp.

Caleb Dengu, chairman of Rio Energy gave credence to the project highlighting the role of the partners.

“CGGC will develop the project and assist with the fundraising,” Caleb Dengu, Ltd said last week. The power plant at Sengwa will be constructed in four phases of about 700 megawatts each, bringing total capacity to 2,800 megawatts.

Deliberating on Rio Energy’s capacity to undertake the project he said,“We have coal reserves to support a 10,000-megawatt plant at Sengwa,” Dengu said.

A 250 kilometer (155-mile) pipeline will carry water from Lake Kariba to Sengwa. The pipeline, and a 420 kilovolt-ampere power line, will be built by PowerChina, said Dengu. The first phase of the project will cost about $1.2 billion.

The Industrial and Commercial Bank of China has given a formal expression of interest in the project and is negotiating with Sinosure, also known as the China Export and Credit Insurance Corp, to cover country risk insurance costs.

What is the impact of this project on Zimbabwe’s Ailing power sector?

Zimbabwe is heavily reliant on its coal and water resources to produce electricity. The bulk supply is produced at the Kariba Dam Hydroelectric Power Station (750 MW), at the Hwange Thermal Power Station (920 MW) and at three smaller coal-fired power stations, all of which are managed by the ZESA subsidiary, the Zimbabwe Power Company (ZPC).

Zimbabwe plunged into an unprecedented crisis causing the electricity supply to drop to less than half of the country’s demand. The crisis was caused by declining water levels at the Kariba Dam as well as technical faults at the Hwange Power Station.

 “These will bring in an additional 600MW to the National Grid. As such, the production of all the supporting throughput to facilitate the smooth increment of our energy supply must begin now,” he said.

 Zimbabwe’s power sector

Zimbabwe is heavily reliant on its coal and water resources to produce electricity. The bulk supply is produced at the Kariba Dam Hydroelectric Power Station (750 MW), at the Hwange Thermal Power Station (920 MW) and at three smaller coal-fired power stations, all of which are managed by the ZESA subsidiary, the Zimbabwe Power Company (ZPC).

Zimbabwe plunged into an unprecedented crisis causing the electricity supply to drop to less than half of the country’s demand. The crisis was caused by declining water levels at the Kariba Dam as well as technical faults at the Hwange Power Station.

Consistent power shortages have a debilitating effect on its economy

Zimbabwe faces consistent power shortages as indicated by an estimated deficit of approximately 60%. The Zimbabwe Electricity Supply Authority’s (ZESA) generation capacity was measured in February 2016 as producing at only 845MW, against a projected national demand of 2,200 MW and an installed capacity of approximately 1,940MW.

Access to electricity is estimated at 52% of the total population, comprising approximately 78% of the urban population and 40% of the rural population. Approximately 200,000 urban households and 1.2 million rural households do not have access to electricity. The country has been importing power from South Africa, Mozambique, and the DRC to try and cover the deficit. Nevertheless, the Government maintains a target of achieving 85% electricity access by 2020.

How important is this project to the current government?

President Emmerson Mnangagwa. envisaged a leap in the energy sector in the aftermath of the pandemic.

 The president said there was growing hope after water inflows are improving in Kariba Dam, a key source of hydropower for the country.

The two units, 7 and 8 at Hwange Thermal Power Station under construction by China’s Sinohydro at a cost of 1.5 billion U.S. dollars, were expected to be commissioned during the second quarter of next year, he said.