Why Zimbabwe failed to save three old power plants

Harare and the ‘little-known companies’

The Harare power station is 82 years old, built as the battle of Stalingrad raged in World War 2. It has been basically idle for years, only coughing up little power intermittently. To refurbish the station, government chose Jaguar Overseas for the US$73 million contract.

In its tender documents, Jaguar, represented again by Intratrek, claimed it would secure cash from Indian funders, including the Indian Eximbank. However, the bank had at the time raised a note on Jaguar and another Intratrek partner, Angelique International. According to the bank, the two were part of a group of “little-known companies” that had benefited from “a large number of hugely concessional lines of credit extended by India to highly indebted poor, low and middle-income countries in Africa”. The bank said it had “pointed this out to the ministries of finance and external affairs (of India)”.

Inside government, some raised concerns that Jaguar had been awarded the Munyati contract after failing to deliver on the Harare plant. In response, the then State Procurement Board responded strongly in a letter, dismissing any attempts to reverse the award as “irrational and illegal”. They pressed on with the contract. The project never took off.

Bulawayo: Losing battle

The Bulawayo plant was commissioned in 1947, and for years was an iconic marker of the city. In 2015, government announced it was seeking US$110 million from the India Eximbank to revive the plant. The proposed project included an ambitious plan to build a pipeline from Khami Dam to supply water to the station’s boilers.

The plans were disrupted partly by a war between the Bulawayo City Council, the original owners of the plant before legal changes, and ZPC. The power company had been granted a generating licence by the Zimbabwe Energy Regulatory Authority (ZERA) to lead the repowering project. ZPC also failed to reach financial close with India Eximbank, which had tendered for contractors to work on the project. This failure left authorities with no options but to decommission the plant.

No ‘dirty’ funding

In 2020, Rio Energy, a unit of RioZim, announced that it had reached an agreement with China Gezhouba Group Corporation to build the long-delayed Sengwa coal power plant for US$3 billion. A year later, Chinese banks announced that they would no longer fund coal projects abroad. That took Chinese banks, the world’s biggest funders of such projects, off the table. China’s decision left the Sengwa project, which would have been Zimbabwe’s largest ever energy investment, without a funder. Yet, in the years when coal funding had been available, Zimbabwe had mishandled the opportunities that had come its way. The window was missed, and now it has closed.-NewZWire

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