The Sunday News
Dumisani Nsingo Senior Business Reporter
CHINA Africa Sunlight Energy is engaged in power generation tariff negotiations with the Zimbabwe Energy Regulatory Authority (Zera) which will pave way for the company to sell power to the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) from its proposed $1 billion thermal power station in Gwayi at an agreed rate between the two parties.
The company’s deputy general manager Retired Colonel Charles Mugari said the negotiations between the two parties were likely to be concluded this week paving the way for the company to start the construction of its 600 megawatt (MW) power plant.
The power station would see the enactment of a 240-kilometre power line from the source to Insukamini as well as a pipeline link from the Gwayi-Shangani dam which is under construction to the plant.
China Africa Sunlight was awarded an Environmental Impact Assessment certificate for the construction of the power station by the Environmental Management Agency in June but has been in talks with Zera over the Power Purchase Agreement (PPA).
“We are finalising talks on tariff generation between today (yesterday) and tomorrow and by next week everything will be in order. We are just meeting to endorse the agreement.
“Thereafter, we will start preparations for the construction of the plant and we have set our sights on completing the first phase before the end of the year and by 2016 we are looking at contributing 300 megawatts to the national grid with the second phase being set to start in 2017,” Rtd Col Mugari said.
The company’s proposed thermal power station is one of the many projects, which Government is relying on to reduce the country’s power deficit.
The country requires nearly 2 200 MW, but generation locally cannot meet the demand as only 1 300 MW is being produced, and imports cover the deficit.
Zera acting chief executive officer, Mr Misheck Siyakatshana, confirmed that the energy regulatory authority was engaged in talks with China Africa Sunlight over tariff generation issues but said the negotiations were at a confidential stage.
“The tariff negotiations are part of the PPA that will be signed between the two parties which will enable China Africa Sunlight to sell power to ZETDC and ZETDC to buy power from China Africa Sunlight ,” Mr Siyakatshana said.
A PPA is a contract between two parties, that is, one which generates electricity (the seller) and one which is seeking to purchase electricity (the buyer).
The PPA defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation; schedule for delivery of electricity; penalties for under delivery; payment terms and termination.
