Sengwa power station
|This article is part of the CoalSwarm coverage of Zimbabwe|
Sengwa power station, also known as Gokwe North power station or the RioZim Project, refers to a number of proposals for a coal-fired power station near the Sengwa coal field in Gokwe North, Zimbabwe.
The map below shows Gokwe, the approximate location where the plant would be built near the Sengwa coalfield.
In 1989 the Zimbabwe government granted a coal mining license to Sengwa Colliery, a company owned by RioZim and Rio Tinto. The Sengwa coalfield has an estimated 538 million tonnes of coal reserves.
In 1997 the Gokwe North Power Station project was proposed for the Sengwa coalfield, but the project was not implemented due to economic conditions.
The project was later awarded by the Zimbabwe Electricity Supply Authority (ZESA) to Rio Zimbabwe Limited (RioZim), which said it was planning a larger 2000 MW power station than the original concept of 1400 MW. ZESA granted an independent producer license to RioZim in 2010 to establish the power plant.
In 2013 Riozim said it was seeking funding to start the project, but was facing financial constraints stemming from a US$91 million debt.
In January 2014 the Zimbabwe government said RioZim risks losing its independent power producer's license and the Sengwa coal concessions if it fails to make progress on its Gokwe North power project in the next six months. The project costs an estimated US$4 billion.
In February 2014 it was reported that Indian state-owned Bharat Heavy Electricals Limited and Shandong of China were among companies that had expressed interest in partnering with RioZim on setting up a 250 MW plant at its coal fields in Gokwe. The strategy envisages the construction of a number of smaller power plants over the next 10 years.
In May 2015 RioZim said it was considering a US$2.1 billion investment in a 1,400 MW plant using its deposit at Sengwa to supply its own needs and to sell to Eskom in South Africa and Namibia Power Corporation in Namibia. Eskom said it would purchase the power but would not invest in the project. Zimbabwe would have to upgrade its transmission network to export the power.
In July 2015 Eskom expressed interest in bankrolling the Sengwa project, at up to 2,400 MW.
In June 2016 RioZim said it was still considering its proposed 2,400 MW Sengwa thermal power project near Gokwe, even though the company has yet to secure an off-take agreement, with Nigeria’s Dangote Group and an unnamed Chinese firm reportedly interested in the venture.
According to the Southern Times (August 2016), RioZim has been granted a license for a 1,200 MW coal plant in Sengwa.
According to a September 2016 Bloomberg report, Riozim was working to raise the US$2.1 billion needed for the plant. RioZim Non-Executive Director Caleb Dengu said that potential financiers from Dubai or South Africa would be interested in Eskom committed to an off-take agreement, but not if ZESA committed, since "ZESA is not bankable." Riozim had reportedly selected State Nuclear Electric Power Planning Design and Research Institute, located in Beijing, to design the generators for the project, which was described as 2800 MW in size. An Eskom spokesperson said that the company knew of the project but hadn't had any direct engagement.
In November 2017 it was reported that RioZim had picked two "serious potential investors" for the project - one from China and one from South Korea - out of 12 that had submitted their bids. The two potential investors will send their teams to Zimbabwe in February 2018 for pre-feasibility studies and accessing of appropriate funding models for the Sengwa project. RioZim is seeking about US$1.5 billion for the composite project, which has constituent parts that will entail the development of a coal mine, thermal power plant, water pipeline to the power station and a transmission line to the main grid.
In May 2018 it was reported that RioZim was evaluating proposals from six companies to participate in its US$1.2 billion Sengwa power project, which was described as 700 MW. The company was reportedly in talks with mainly Chinese groups, including National Energy Investment Group. It expects to conclude negotiations later this year, after the July 2018 elections.
In May of 2019, RioZim announced that construction on the project was expected to start in the next twelve months.
In October 2019, RioZim said it will sign an engineering procurement and construction contract (EPC) with Power China for construction on the first phase of the Sengwa plant. RioZim is also pushing for Special Economic Zone (SEZ) status for the Sengwa project. The company is still seeking financing.
In April 2020, it was reported that RioZim will build the plant with China Gezhouba Group Corp. The Industrial and Commercial Bank of China has given a formal expression of interest in the project and is negotiating with Sinosure (also known as the China Export and Credit Insurance Corp) to cover country risk insurance costs. It was reported that the plant will ultimately be constructed in four phases of 700 MW each, totaling 2,800 MW.
The proposed plant is coming under increasing fire from a network of local, regional and global civil society organisations who in May 2020 called on RioZim and the government to abandon the project citing climate change concerns and the plant's expected detrimental impacts on local communities. The Sengwa community consists mostly of peasants who rely on rain-fed agriculture and, according to campaigners, the proposed project would also result in river-water pollution, environmental degradation and internal displacements of hundreds of families. A survey carried out by by the groups Information for Development Trust (IDT) and the Centre for Alternative Development (CAD) revealed that, in addition to the adverse effects of the coal plant, Gokwe may suffer more floods while household incomes were acutely low and poverty high. The survey also revealed that the Sengwa and Gokwe communities were not aware of the impending RioZim project or the negative effects it would have on them.
- Sponsor: Rio Energy Ltd.
- Parent company: RioZim
- Location: Gokwe North, Midlands province, Zimbabwe
- Coordinates: -18.22, 28.93 (approximate)
- Status: Permitted
- Capacity: 700 MW
- Projected in service:
- Coal Type: Lignite
- Coal Source: Sengwa coalfield
- Source of financing:
Articles and resources
- "Foreigners eye RioZim's Sengwa," The Herald, Feb 17, 2014
- "Riozim Limited," Lynton Edwards, accessed Feb 2014.
- "RioZim in Sengwa due diligence," Daily News, May 14, 2013.
- "Zimbabwe: RioZim Risks Losing Power Producer Licence," The Herald, Jan 31, 2014.
- "RioZim to build 1,400MW coal-fired power plant," Business Day, May 9, 2015
- "Eskom, has expressed interest in bankrolling implementation of the long awaited 2,400MW Sengwa Power Project," cfuzim, July 2, 2015
- "Investors keen on $2bln Sengwa project," The Zimbabwean, June 24, 2016
- "OM to commission Zim power plant," The Southern Times, 19 August 2016
- Godfrey Marawanyika, "RioZim Chooses Chinese Group to Design $2.1 Billion Power Plant," Bloomberg Markets, September 24, 2016
- "RioZim shortlist two for $1,5bn power station," Business Reporter, November 17, 2017
- "RioZim Evaluating Bids for Investors in Zimbabwe Power Plant," Bloomberg, May 16, 2018
- "RioZim’s Sengwa Thermal Power Station To Start Soon," ZimEye, May 1, 2019
- "RioZim closer to 2 400MW power deal," The Zimbabwe Mail, October 3, 2019
- "China to Help Build $3 Billion Coal Plant in Zimbabwe," Bloomberg, April 28, 2020
- US$3bn Sengwa coal project causes uproar, The Standard, May 17, 2020