Stanbic Bank South Africa will provide an US$160 million loan to Zimbabwe Power Company (ZPC) for the expansion of Kariba South Hydropower Station project.
The loan will cover several development costs, including debt maintenance, consultancy works, old Kariba plant refurbishment, construction aggregates and fees and permits, among others.
According to sources, ZPC has a contract with Nampower, Namibia's power utility, for the sale of 80 MW as security guarantee for the Stanbic loan. The agreement entails a load factor of 50%, which means that ZPC will only sell 40MW to Nampower.
The project will add 300 MW to the Kariba South Power Station, which has been in operation since 1959. It has six generators of 125 MW capacity each for a total of 750 MW. The station can generate a maximum of 5000 GW/hrs with a load factor of 80 percent.
China's Sino-Hydro is the EPC contractor for the project and it will be paid via a loan from the China EximBank.
The total project investment is estimated at US$533 million. The EPC costs are estimated at US$354 million.
The State Procurement Board is being advised by HATCH South Africa (technical), KPMG (financial), African Finance Corporation (transaction) and Norton Rose (legal).
The Kariba Dam is a hydroelectric dam in the Kariba Gorge of the Zambezi river basin between Zambia and Zimbabwe. It supplies 1,626 MW of electricity to parts of both Zambia and Zimbabwe and generates 6,400 GWh per year. Each country has its own power station on the north and south bank of the dam respectively.