• September 23rd, 2018
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NamPower awaiting RioZim proposal on 1400MW power plant

Special Focus, Business & Finance
Special Focus, Business & Finance

Namibia’s national power utility NamPower this week said it has not received any proposal from Zimbabwean mining company RioZim regarding the establishment of 200MW and 300MW power plants to produce daily generation of up to 1 400 megawatts. RioZim proposes generating electricity using coal from its Sengwa concession in the north-west of Zimbabwe that is estimated to consist of about 1.36 billion metric tons of coal deposits. According to a presentation made by RioZim to Zimbabwe’s Parliamentary Committee on Mines and Energy earlier this month, the mining company stated: “The chances are that this project will only be bankable when PPAs (power purchase agreements) exist with Eskom, NamPower and such like utilities whose risk will be acceptable to lenders.” However, yesterday NamPower’s Manager: Corporate Communication and Marketing, Tangeni Kambangula, said: “NamPower is not looking into long-term and fixed power purchase agreements because of the local surplus power that will be available after the Kudu power project is commissioned.” Reports also surfaced from South Africa that Eskom would be willing to buy electricity from planned projects in Zimbabwe but only as and when Eskom has a shortfall, but the South African power utility’s spokesman, Khulu Phasiwe, emphasised that it would not provide assistance to finance such projects. According to a Reuters report RioZim was considering investing heavily in power plants to utilize its coal deposit at Sengwa to supply its own needs and to sell surplus electricity to Eskom and NamPower. Both Zimbabwe and South Africa experience regular power outages, which analysts attribute to state-owned utilities having failed to invest timeously in adding new capacity to match economic and population growth. According to the Southern African Power Pool (SAPP), most members of the Southern African Development Community (SADC) have experienced economic growth of more than 5 percent in recent years, resulting in unprecedented growth in electricity consumption and demand. SAPP noted that an increase in demand for base metals, which has resulted in high metal prices on world markets, has seen new mining companies being established in the SADC region in the last few years. However, SAPP, which was created with the primary aim to provide reliable and economical electricity supply to the consumers of each of the SAPP members, pointed out that inadequate investments in generation and transmission infrastructure over the last 20-years as well as electrification programs have partly contributed to the increased consumption and demand. “The challenge was identified and communicated but not adequately mitigated,” stated a SAPP presentation. Since initially proposing the project, RioZim has taken a renewed approach as a single 1400MW power plant would be too large for a project in Zimbabwe under current market stresses. “1400MW is difficult to find bankable offtake for, and US$2bn is a very large sum of money for the Zimbabwe market. The new approach is to look to develop smaller modules of between maybe 250MW and 350MW which are smaller and as a result, hopefully easier to package into an implementable solution,” stated the RioZim presentation.
2015-05-07 10:27:51 3 years ago
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