Hwange power station

From Global Energy Monitor
This article is part of the CoalSwarm coverage of Zimbabwe
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Hwange power station is a coal-fired power plant (and the biggest power plant in Zimbabwe) with an installed capacity of 920 megawatts (MW) in Matabeleland North Province, Zimbabwe.

Due to deterioration, the plant is only capable of operating at partial capacity. A rehabilitation package has been funded.

In addition, two new units adding 670 MW are under construction.

Location

The undated satellite photo below shows the existing Hwange power station, near Hwange, Hwange District, Matabeleland North Province.

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Background

Hwange power station was built in two stages and consists of 4 units of 120 MW each and 2 units of 220 MW each. Construction of Stage 1 commenced in 1973, but was suspended in 1975 due to economic sanctions imposed on Rhodesia. The 4 x 120MW units were commissioned between 1983 and 1986 and the 2 x 220MW were commissioned in 1986 and 1987. It is owned by the national electricity company Zimbabwe Electricity Supply Authority, also known as ZESA Holdings, and operated by Zesa's energy unit Zimbabwe Power Company.[1]

Water is sourced from the Zambezi River, and coal from the nearby Wankie colliery open cast mine. About 250,000 tonnes of coal are stockpiled on site.[1]

In 2009, Namibia's NamPower made agreements to help ZESA to revive four units at the aging power station in exchange for power deliveries.[2]

Rehabilitation of existing facility

In May 2017, Standard Bank Group said that it had finalized a US$120 million debt package with ZPC to rehabilitate existing power generator infrastructure at Kariba South Hydro and Hwange Thermal Power Station. The deal aimed at easing Zimbabwe's long-standing power generation deficiency, which provides around 1,000 MW against average demand of 1,400 MW or more. Currently Zimbabwe imports electricity from Mozambique and South Africa; however, acute cash shortages have led to a US$43 million debt with South Africa's Eskom, which now is threatening to curtail the 300 MW of capacity that it is providing to ZESA if the debt is not cleared by the end of May. Hwange power station was only producing 327 MW out of an installed capacity of 920 MW.[3]

In September 2018, it was reported that the Government of India was set to provide a line of credit of US$310 million to Zimbabwe to enhance the lifecycle of the Hwange thermal plant.[4]

In early 2021, the power station operated an average of two units against a target of five units. Unit 3 was on an extended major overhaul. The reliability of Units 1, 4, and 5 was also affected due to overdue planned outages and a February 10, 2021 fire incident which caused extensive damage to Units 1 and 2. In addition, Unit 6 was unavailable in the end of January due to leaking hydrogen coolers.[5]

After being out of service, unit 5 was returned in service in September 2021, improving the station's consistently low output[6] by 150 MW.[7]

In November 2021, a loan facility was being negotiated with India to fix the power station, as an estimated US$300 million was needed to continue work on the old Hwange units.[8]

In November 2022, the Zimbabwe Power Company stated that they expected to begin the refurbishment project, funded by the Export-Import Bank of India, in the third quarter of 2023. The rehabilitation would be conducted in three phases and would give the power station an updated capacity of 880 MW across the six existing units.[9]

Description of Phase III expansion

A project aimed at adding two generation units to Hwange Power Station, known as Phase III, was to be launched in 2000 but stalled due to lack of funds.[10]

The project was later revived. Zimbabwe Power Company, the power generation unit of State-owned power utility Zesa Holdings, plans to expand the power station by 600 MW. The Environmental Impact Assessment (EIA) has been approved. Plans again stalled after the Chinese contractor who won the right to undertake the project, China Machinery Engineering Company, failed to secure funding within eight months. Expansion requires US$1.3 billion to $2 billion. Zesa is seeking other bidders to construct the plant.[11]

In September 2014, Zimbabwe Power Company announced it had finalized negotiations with Chinese contractor Sino Hydro Corporation for the expansion of Hwange Power Station.[12] (Sino Hydro is also doing feasibility studies for the proposed 600 MW Hwange Makomo power station sponsored by Makomo Resources.[13]) The expansion was granted a generation license in January 2015.[14]

Construction was planned to start in 2016, with a planned start date of 2019.[15]

In August 2016, it was reported that financing was planned for completion by end of 2016.[16]

In July 2017, Chinapower signed an engineering, procurement and construction (EPC) contract with Zimbabwe for expanding the power station. In November 2017, China’s state-owned Dongfang Electric Corp signed a contract with ChinaPower to supply three major engines for two 335 MW coal-fired power units at the plant.[17]

The groundbreaking ceremony of the project was expected to be held in mid-June 2018, following the release of China Export–Import Bank funds for the project.[18]

In July 2018, a groundbreaking ceremony was held for the expansion. It was planned for commissioning in 2022.[19] In December 2018, the Zimbabwe Power Company (ZPC) said it intended to recruit more than 100 workers on a fixed term contract of up to 36 months for the project.[20]

In March 2019, it was reported that construction work on the project had begun.[21] In August 2019, the expansion of the power station was 18% complete, with commissioning on track for January 2022.[22]

In November 2019, it was reported that Chinese banks had indefinitely suspended US$1.1 billion in financial support for the expansion, citing financial irregularities on the part of the Zimbabwe Government. According to the Zimbabwe Independent, "Chinese investors and financial institutions, including China Eximbank, are also worried about currency and exchange rate volatility which have affected projects they are bankrolling in Zimbabwe." The project was described as 22% complete.[23]

Despite the financing issues, in April 2020, it was reported that work on the expansion was almost 40% complete and on schedule.[24] In June 2021, the work was 62.54% complete instead of the planned 85.9%. The project was affected by Interim Payment Certificate (IPC) outstanding payments as well as the effects of Covid-19.[5]

In August 2021, the work was 68% complete.[25] In December 2021, the work was 76% complete and on track for completion in 2022.[26] In April 2022, the work was 84% complete. Units 7 and 8 were set to be completed in November 2022 and February 2023 respectively.[27]

In November 2022, the Zimbabwe Power Company expected one of the two expansion units to be online by the end of the year. The project's contractor stated that testing of the turbine had begun. The other unit, Unit 8, was slated for commissioning sometime in 2023.[9]

In January 2023, Unit 7 was expected to be commissioned by the end of the month.[28]

Financing for Units 7-8

In May 2015, Zimbabwe officials said they expected to achieve financial closure for the Hwange expansion project by the end of the year. The total cost for the project was estimated at US$1.4 billion. The China Export Import Bank (Eximbank) was expected to bankroll the project at nearly US$1.2 billion, while the Zimbabwe Power Company (ZPC) would fund the remaining $0.2 billion.[29]

In December 2015, China agreed to provide a US$1.2 billion loan to add 600 MW of generating capacity to the Hwange station.[30] In addition, that month, it was reported that China would help rehabilitate the plant in addition to expanding it.[31]

In December 2016, the Zimbabwean government approved a US$1 billion loan facility from China Exim Bank. The loan would be paid back over 20 years with a grace period of seven years and an interest rate of 2% per annum. The contract for the expansion was awarded to Sino-Hydro Corporation Ltd. The special purpose vehicle created for overseeing project development was named the Hwange Electricity Supply Company (HESCo), owned by ZPC and Sino-Hydro. In January 2017, ZPC managing director Noah Gwariro said that the company "expects financial closure for the Hwange expansion project by the end of March 2017."[32]

In January 2018, Zimbabwe Power Company said it had raised its equity contribution from Standard Bank South Africa (US$40 million) and Afreximbank (US$76 million). Sinohydro said China Eximbank should now be ready to disperse funds from a US$998 million loan for the plant.[33]

In June 2018, Zimbabwe concluded the loan agreement for US$998 million with the Export-Import Bank of China.[34][33] As noted above, construction is underway.

Transmission line

In December 2021, the government commenced construction of a 360 km electricity transmission project linking the power station to Bulawayo.[26] In April 2022, it was reported that 810 of the 875 transmission towers had been placed.[27]

Details of Phase III (Units 7-8) expansion

  • Sponsor: Zimbabwe Power Company
  • Parent company: ZESA Holdings
  • Location: Hwange, Hwange District, Matabeleland North Province, Zimbabwe
  • Coordinates: -18.3835, 26.47 (exact)
  • Status: Construction
  • Capacity: 670 MW (Units 7-8: 335 MW)
  • Type: Subcritical
  • Projected in service: 2023
  • Coal Type: Bituminous
  • Coal Source: Domestic (Makomo Resources)
  • Source of financing: China Export Import Bank (US$998 million in debt), Standard Bank South Africa (US$40 million in debt), Afreximbank (US$76 million in debt)[33]

Articles and resources

References

  1. ↑ 1.0 1.1 "Hwange Power Station," Zimbabwe Power Company website, accessed February 2014
  2. ↑ "Botswana, Namibia to ramp up Zim power generation," Engineering News, March 21, 2010
  3. ↑ "South African bank concludes $120 million package for Zesa," Chronicle, May 16, 2017
  4. ↑ "India to provide $310m for Zimbabwe’s Hwange thermal plant," Power technology, November 5, 2018
  5. ↑ 5.0 5.1 "Hwange Thermal expansion project 62 pc complete," The Herald, June 2, 2021
  6. ↑ "Zimbabwe cuts power to some regions after station fault," Reuters, August 4, 2021
  7. ↑ "Zimbabwe: Power Supply Improves With One Generator Unit Back On Grid," All Africa, September 18, 2021
  8. ↑ "Zimbabwe: U.S.$310m Loan for Byo, Hwange Thermal Units," All Africa, November 15, 2021
  9. ↑ 9.0 9.1 "Power projects update: ZPC sets 2023 for Hwange old plant rehab," Newzwire, November 16, 2022
  10. ↑ "Electrical Power in Zimbabwe - Overview," MBendi, accessed February 2014
  11. ↑ "Funding stalls power project," The Herald, January 9, 2014
  12. ↑ "Hwange expansion contract negotiations complete," The Financial Gazette, September 18, 2014
  13. ↑ "Makomo Resources in feasibility studies for thermal power station in Hwange," Sunday News Reporter, February 15, 2015
  14. ↑ "Hwange gets power generation license," Chronicle, January 14, 2015
  15. ↑ "Hwange thermal station expansion on course," The Chronicle, March 26, 2015
  16. ↑ "$1,5bn Hwange power plant project gets rolling," cfuzim, August 2, 2016
  17. ↑ "China's Dongfang Electric, Power Construction Corp sign deal for Zimbabwe plant," Reuters, November 15, 2017
  18. ↑ "China releases funding for Zimbabwe's largest power station expansion project," Xinhua Net, June 1, 2018
  19. ↑ "Hwange Power Station strategic," The Sunday Mail, July 1, 2018
  20. ↑ "ZESA To Recruit 100 Workers For Hwange Thermal Power Station Expansion Project," Pindula News, December 3, 2018
  21. ↑ "Construction work begins at Hwange," Herald, March 4, 2019
  22. ↑ "Work on US$1.5 billion Hwange expansion to be completed by 2022," The Asset, August 7, 2019
  23. ↑ "Chinese suspend US$1,3bn projects," Zimbabwe Independent, October 24, 2019
  24. ↑ "Hwange Power Station expansion on schedule," The Herald, April 6, 2020
  25. ↑ "600 MW Hwange expansion project in Zimbabwe at 68% complete," Construction Review Online, August 14, 2021
  26. ↑ 26.0 26.1 "New Power Supply for Bulawayo," Chronicle, December 14, 2021
  27. ↑ 27.0 27.1 "Hwange Power Station expansion project latest update," Construction Review Online, April 27, 2022
  28. ↑ "Hwange Power Station expansion project, Zimbabwe’s largest power station," Construction Review Online, January 6, 2023
  29. ↑ "US$1,4 Bn Funding For Hwange Power Station," The Financial Gazette, May 28, 2015
  30. ↑ Zimbabwe: China promises $1.2bn loan for Hwange thermal power plant upgrade ESI Africa, December 2, 2015
  31. ↑ Godfrey Marawanyika and Chengetai Zvauya, "China Commits $1.2 Billion to Zimbabwe Power Plant as Xi Visits," Bloomberg, December 1, 2015
  32. ↑ "Zimbabwe Hwange Power Station Expansion Makes Headways," ESI Africa, January 11, 2017
  33. ↑ 33.0 33.1 33.2 "Zesa raises $116m for Hwange Thermal Power Station," The Herald, January 26, 2018
  34. ↑ "Zim gets $1bn Chinese loan for power generation," Fin24, June 2, 2018

Related GEM.wiki articles

External articles

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