Why Zimbabwe failed to save three old power plants

Zimbabwe is shutting down three thermal power stations, with a combined installed capacity of 240MW, because they have become too old and costly to run.

According to Energy Minister Edgar Moyo: “At an average age of 75 years, the thermal plants significantly exceed their intended lifespan of 25 years, and operating them has become financially unsustainable.” 

He says running the Bulawayo station now costs 46 US cents per kilowatt hour, making it too expensive to run.

Over recent years, the government announced various deals to revive these power stations. What happened to them? The contracts fell through mostly because they were awarded to companies that did not have the pedigree to deliver. Here, we take a look back at what went wrong.

Munyati: The ‘credible partners’

The Munyati Power Station was built in 1946, the same year as the Nuremberg trials after World War 2. Initially, it had a capacity of 120MW but fell into disrepair. In 2015, the government sought partners to add 60MW. The US$163 million tender was awarded to Jaguar Overseas, an Indian firm. After four years of waiting, in 2019 ZPC acting MD Robson Chikuri wrote to the Procurement Regulatory Authority of Zimbabwe to cancel the deal: “A due diligence by ZPC on Jaguar Overseas Limited noted that whereas Jaguar Overseas Limited indicated that they had secured 100% funding for the project, only 15% of the funding could be confirmed by their funders.”

When ZPC became impatient over the delays, Jaguar wrote to claim it had funding partners queuing up, mentioning PTA Bank and DBSA. The company wrote: “DBSA in particular has expressed repeated interest to support and lead a fundraise for Munyati. On request, they will issue a letter of support.”

Why did ZPC sign up a company that couldn’t do the job? Samuel Undenge, then Energy Minister, had remarkably insisted that tender winners were “not compelled to demonstrate a track record in execution of energy projects”. These companies were only required to partner with “credible, reliable competent technical partners”.

Who were these “credible” partners? Jaguar’s local partner was Intratrek, a company represented in Zimbabwe by Wicknell Chivayo. Intratrek itself was not an energy company. It was a middleman for other contractors, themselves troubled. Green Solar Europa, which Intratrek listed as one of its key partners during the tender, was in fact insolvent at the time the tender was awarded.

Continued next page

(271 VIEWS)