Thursday, 29 September 2011 11:07
By Shame Makoshori
A board member with Zimbabwe’s state-run power company says the cost of constructing the 1 650 megawatt (MW) Batoka hydropower station has doubled from US$2,5 billion when the project was conceived in 1993.
The power project is a joint venture between Zimbabwe and Zambia.
The Batoka power station turbines were expected to start turning in 2001, generating an additional 800 MW for Zimbabwe.
However, lack of funding and reluctance by the Zambian government to the start the project has delayed its implementation.
ZESA Holdings deputy chairperson, Simba Mangwengwende, who worked for years as the utility’s chief executive officer, told delegates at a recent mining indaba that fresh studies were imperative to establish the true cost of completing the project should its promoters decide to start implementing it.
“The cost of constructing Batoka could have doubled by now,” said Mangwengwende.
“We are still using 1993 estimates. We need to (revise the) estimates,” he said.
Investors at the conference had queried why Zimbabwe had continued to mourn over power shortages when huge potential was lying unexploited through several projects, including Batoka.
Construction of the power station was expected to resolve the country’s power shortages which have disrupted the normal functioning of the country’s frail-but-recovering economy.
If the project had been brought to life, joint owners, Zimbabwe and Zambia, were expected to export surplus power to countries within the southern African region.
But Zambia, which has shifted goal posts several times, appears to be committed with power projects in its territory, such as the Kafue Gorge, which is estimated to cost US$2 billion.
This would mean cash-strapped Zimbabwe, battling blackouts due to electricity generation constraints largely attributed to lack of investment in new plants as well as antiquated machinery at existing plants, would be forced to rope in partners to bankroll the project. This, however, would require the approval of Zambians with whom it shares the Zambezi River.
Another option would be granting independent power producers the right to build and operate the power station on a commercial basis.
“There were misunderstandings between Zimbabwe and Zambia over the assets at Kariba but this has been resolved. Now that this has been resolved it is possible for the countries to work together,” Mangwengwende said.
A senior ZESA official was recently quoted in the local press saying Zimbabwe needed cooperation from Zambia to implement the project.
“The question of whether we go it alone or not entirely depends on the Zambians’ willingness to join into the venture and I must say that right now the political differences between the two countries regarding the project (Kariba) have been resolved. But Zambia can say that they are unable to raise the requisite financial resources because they are already engaged in other power projects,” said the official.
The Batoka dam site is on the Zambezi River, about three kilometres downstream the Mwemba Falls, and 54 km downstream the Victoria Falls.
Misunderstandings over the ownership of the Kariba hydroelectric power plant, which the two countries share, prompted the Zambian government to develop cold feet over Batoka in 1994.
“Such a background does not give us a firm foundation to enter into yet another costly project like the Batoka one,” former Zambian energy minister, Edith Nawakwi, told The Financial Gazette in 1994.
Demand for power had been rising in Zimbabwe since 2009 when new policies introduced by the inclusive government enabled companies to resume production.
A recent report by the Ministry of Economic Planning and Investment Promotion said the mining industry alone had received new investment proposals worth US$1,7 billion since 2009.