Zimbabwe has looked at Namibian financial institutions for the expansion of the Kariba South Hydro Power Plant.

Standard Bank Namibia will provide a loan facility of N$500 million to the Zimbabwe Power Corporation (ZPC) for the 300 MW extension of the Kariba South Hydro Power Plant, the New Era reported.

A cross border facility

The facility makes up 10 percent of the engineering, procurement and construction costs for the expansion with China Exim Bank providing the balance of 90 percent.

Sino-Hydro, a Chinese firm, was contracted to construct two additional units at Kariba with a capacity to generate 300MW at a cost of US$533 million Work on the project has started with excavation works on batching plants, access roads and water tanks having been completed.

The Head of Corporate Banking at Standard Bank Namibia, Amit Mohan, said the extension of loan facility to ZPC  “is significant in its contribution to increasing its power generation in southern and central Africa”.

“The execution of this innovative finance structure was the result of Standard Bank’s local presence in both jurisdictions and its strong relationships with key stakeholders,” Mohan says.

The structure of the facility is cross-border, placing reliance for repayment on a long-term power purchase agreement (PPA) between ZPC and NamPower.  ZPC has a long track record of delivering power to NamPower.

Ending the power deficit early

Zimbabwe’s Minister of Energy and Power Development Dr Samuel Undenge, said the power deficit being experienced countrywide should end by 2018.

“We need the project to be complete even before the due date but you have to supervise the contractor in ensuring quality standards are met throughout the project,” he said.

ZPC managing director, Engineer Noah Gwariro, said US$91 million had been disbursed so far for the Kariba project with China Exim Bank providing US$80 million and the remainder coming from ZPC.

“The first drawdown was made on October 31 last year and this paved way for the contractual commencement on November 10 last year,” he said.

“This means about US$260 million is yet to be disbursed and it is going to come in tranches.”

–The New Era