Zimbabwe Power Company (ZPC) and NamPower, Namibia’s power utility, have signed a US$150 million power purchase agreement to secure finance for the expansion of Kariba South Hydropower Station project.
Standard Bank will provide an US$150 million loan for the project. ZPC will repay the loan by selling power to NamPower, which will start in the first quarter of next year.
A few days ago, Stanbic Bank South Africa provided an US$160 million loan to ZPC for the project. That loan covered several development costs, including debt maintenance, consultancy works, old Kariba plant refurbishment, construction aggregates and fees and permits, among others.
ZPC has another contract with Nampower 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.
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$1.5 billion. The EPC costs has risen to over US$500 million from the initial estimation of US$319 million.
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.
The expansion of the hydropower station is expected to be operational by 2017.
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.