Zimbabwe has finally signed off on a long-delayed plan for India’s Jindal Power to fix Hwange’s ageing power units, which keep breaking down and causing blackouts.
Plans for a loan from the India Eximbank for this project were announced back in 2021, but there were delays in reaching financial close to start the project. Jindal chairman Naveen Jindal visited Zimbabwe in 2024 to advance the deal.
Now, Cabinet says it has approved a Public-Private Partnership Project between the Zimbabwe Power Company and Jindal, under a Rehabilitation, Operation and Transfer model for Hwange’s 1 to 6 units.
Cabinet said: “Reviving Hwange Power Station’s first six units will benefit Zimbabwe by significantly increasing the national electricity supply, thereby reducing load shedding and ensuring reliable power for industries and households. Reliable power will enable sustained production, boost industrial output, enhance economic activity and create jobs.”
Under such deals, the contractor funds the work upfront and is repaid from electricity sales. Jindal will invest US$455 million to refurbish the power plants, Energy Minister July Moyo says. The overhaul will take about four years. From years five to seven, Jindal will operate the plants and recover its investments, then share revenue with the Zimbabwe Power Company for the rest of the 15-year term.
Moyo however says “further negotiation refinements are ongoing to ensure that the partnership project serves the national interest”, which suggests that implementation of the project may still face more delays.
Hwange installed two units of 300MW each in 2023, under a deal with China Power. But the older six units – commissioned in the 1980s – are past their prime and break down often. Government has spent years trying to get a deal to refurbish these units.
The Hwange Units 1-6 currently produce around 330MW, a third of their original capacity. A refurbishment will lift capacity to 840MW and extend the life of the units, by at least 15 years. Last year, ZESA said negotiations with Jindal would also include a possible investment in four new units of a combined capacity of 1,200MW. It is not clear if this is still on the table.
ZESA’s recent investments in new power infrastructure has come with new debt burdens. Zimbabwe is repaying almost US$1 billion from China Eximbank for Hwange 7-8. In 2023, ZESA said it needed US$35 million per month to pay for power from Hwange. The Hwange 7-8 project also came with a 40km water pipeline, funded by a US$48 million loan from the India Eximbank Bank.
Zimbabwe is currently producing about 1400MW of power, well short of the estimated 2000MW that the country needs at peak. – (NewZWire)
