ZPC – Hwange Power Station Expansion 600 MW – Matabeleland North - Project Profile

Synopsis
"ZPC – Hwange Power Station Expansion 600 MW – Matabeleland North - Project Profile" contains information on the scope of the project including project overview and location. The profile also details project ownership and funding, gives a full project description, as well as information on contracts, tendering and key project contacts.

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Scope
The project involves the expansion of the existing plant with the addition of 2x300MW capacity power units in Hwange, Matabeleland North Province, Zimbabwe.

The US$1,400 million project includes the following:

1. Construction of a coal washing unit

2. Construction of a switch yard

3. Construction of a water transmission pipeline

4. Construction of raw water storage tanks

5. Construction of combustion chambers

6. Construction of chimneys

7. Construction of power house to install turbines and generators

8. Installation of safety systems

9. Laying of transmission lines
Summary
Zimbabwe Power Company (ZPC), a subsidiary of ZESA Holdings (Pvt) LTD, is undertaking the expansion of Hwange Power Station project in Matabeleland North Province, Zimbabwe.

The project involves the construction of Bituminous Coal, COG power plant with installed capacity of 600MW (2 x 300MW). The project will include the construction of a coal washing unit, a water transmission pipeline, raw water storage tanks, a switch yard for power evacuation, and a power house.

In April 2011, ZPC has signed a memorandum of understanding (MoU) with South Africa's Hatch Africa Energy for consultancy services for the expansion of the Hwange power plant. The local partner for Hatch is Zimbabwean representative firm, Zimbabwe Africa Infra-structure Development Group (ZAIDG). KPMG Services Limited has been appointed as the financial adviser and Norton Rose Group as the legal adviser for the project.

In July 2011, ZPC invited expressions of interest from suitably qualified contractors or financiers for , design, built, financing and commissioning (DBFC) of Unit 7 and 8, to be submitted before August 16, 2011.

In March 2012, Zimbabwe Power Company shortlisted six bidders for the project including China Gezhouba Group Company Ltd; China National Machinery Import & Export Corporation (CMEC); Essar Hwange Consortium; Posco Engineering & Consortium Co. Ltd; China National Electric Engineering; and Sinohydro Corporation Limited.

These shortlisted bidders were earlier given a 90-day special tender to come up with detailed bidding by June 5, 2012. However, the deadline was then extended to July 3, 2012. The proposals were supposed to include the funding arrangement, price of the project and should demonstrate technical ability.

On July 11, 2012, three Chinese power companies namely; Sino Hydro Corporation Ltd; China Gezhouba Group Company Ltd; and CMEC submitted their final bids for the development of the project.

In November 2012, SinoHydro and CMEC entered the final stages of the bidding process.

In April 2013, CMEC has been appointed as the DBFC contractor for the project. However, CMEC failed to start the project due to lack of funds for the project.



In June 2014, ZPC proposed to award DBFC contract to SinoHydro.

In October 2014, ZPC signed an agreement with SinoHydro for the project. The scope of the contract covers engineering design, procurement, construction and commission for the project. Under the agreement, ZPC will receive 80% of the fund from the China's EximBank Limited.

In January 2015, the Zimbabwe Energy Regulatory Authority granted license to ZPC for the project implementation.

In December 2015, ZPC signed US$997 million preferential buyers credit agreement with China’s Import and Export Bank.

In March 2016, topographical surveys and geotechnical works for the power plant have been completed.

In October 2016, project is on hold due to funding issues.

In November 2016, ZESA Holdings planning to raise US$314 million for its equity contribution towards the project.

US$1147 million is the contract value of the contract price, 85% amounting to US$997.7 million has been secured through the Preferential Buyer Credit Loan Agreement concluded with China Exim Bank. In turn, China Exim Bank has requested the contractor, Sino-Hydro Corporation, to inject US$176 million representing 15% of the contract price as equity into the project.

On December 8, 2016, project secured approvals from Parliament for US$1000 million loan facility from the Asian financial institution and a limestone supply agreement between HESCo and ZPC was signed.

On November 20, 2017, Power Purchase Agreement(PPA) signed between China’s state-owned Dongfang Electric Corp with Power Construction Corporation of China (China power).

In January 2018, ZPC secured US$400 million funds for the project.

Construction is expected to commence by the end of May 2018.
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Key highlights