Government has formed a new company, Hwange Electricity Supply Company (Hesco), to manage power generation under the $1,5 billion Hwange Thermal Power Station expansion project.
Energy and Power Development Minister Ambassador Simon Khaya Moyo said this in Hwange last Wednesday before President Mnangagwa officiated at the project’s groundbreaking ceremony.
“The project, Your Excellency, was mooted in 2010 and put upon tender or open tender for an Engineering Procurement Construction (EPC) model. Sino-Hydro was then contracted to construct the project.
“China EximBank came in as financiers of the project providing 85 percent of total project costs and the remainder was contributed by the Zimbabwe Power Company (ZPC) and Sino Hydro,” he said.
“A company called Hwange Electricity Supply Company (Hesco) was formed to run the new project.”
The expansion project will run for 42 months creating over 7 000 jobs directly and indirectly.
In 2015, the Zimbabwe Energy Regulatory Authority (Zera) granted Hesco a licence to generate power. The extension of Units 7 and 8 at Hwange Thermal Power plant will see an additional 600 megawatts to the plant’s 920MW being fed into the national grid, a development that Amb Moyo said would go a long way in easing power imports.
ZPC and Sino-Hydro are the equity holders in Hesco with 64 percent shares allocated to ZPC and 36 percent to Sino-Hydro, based on their financial contributions to the thermal power station’s expansion programme. Financial closure of Unit 7 and 8 expansion at Hwange was reached in the first quarter this year.
Amb Moyo said progress towards the implementation of the project quickened after President Mnangagwa’s recent State visit to China. During the visit to the Asian country in April, President Mnangagwa reached an agreement with President Xi Jinping and elevated the two countries’ relationship to Comprehensive Strategic Co-operative Partnership.
Over the years, China and Zimbabwe enjoyed cordial relations in the realms of politics and business resulting in co-operation in infrastructure, agriculture, education, health, and other various fields. It is believed that through the Comprehensive Strategic Co-operative Partnership, China-Zimbabwe ties would definitely yield more mutual benefits.
Officiating at the ceremony, President Mnangagwa said Zimbabwe requires significant investment in the energy sector to meet cumulative demand for power to foster economic growth through industrialisation.
He highlighted that adequate power supply was a pre-requisite for economic growth and sustainable socio-economic development of any nation.