HARARE – The Zimbabwe Power Company (ZPC) has signed its first engineering, procurement and construction (EPC) contract with Intratrek Zimbabwe (Private) Limited (Intratrek) – just a week after government has awarded the 300 megawatt (MW) projects to three companies.
This also comes as Harare grapples with a 1 200MW deficit that has occasioned blackouts of up to 18 hours across industries and homes, and company managing director Noah Gwariro says the ZESA subsidiary requires $6 billion-plus to fully fund its developmental projects.
“At Intratrek, power generation is our expertise. Our feasibility studies (will) commence next week and we hope to finish them soon,” group chief executive Wicknell Chivayo said.
“When we were honoured with such a massive project… it is our obligation to ensure that we hit the ground running and deliver at all costs,” he said.
With the State Procurement Board insisting that the “the accounting officer (ZPC) had recommended the award based on the principle of best advantage and cost differentials”, Intratrek was given the mandate to build solar farms along ZTE Corporation (ZTE) and another Chinese-linked firm Number 17 Metallurgical Construction (Number 17).
While the former has targeted its $202 million project for Gwanda, the latter two will construct their projects at Insukamini and Munyati, and at a cost of $162 million and $197 million, respectively.
The development also comes as Gwariro has disclosed that his company would spend about $4 billion of the $6,5 billion tab on EPC projects such as the three solar deals.
Cumulatively, the projects will cost $562 million.
With Zimbabwe’s vexing power outages expected to run until 2018 – and when a few generating projects are likely to come on board – the announcement of the easy-to-build solar projects has come as a relief for many corporate and household consumers.
However, the finalisation of the project and tender has not been without controversy, as it was cancelled twice after having been initially advertised in November 2012.
While China Jiangxi for International Corporation was among the top-rated bidders – of the six interested parties – Intratrek and ZTE were co-opted when the tender was partially reinstated in March 2014.
“At (a) meeting… held on February 13, 2014, the State Procurement Board noted… the critical shortage of power and its negative effects on… the economy as well as its potential threat to national security,” the SPB said then, adding the two could be added “on condition of successful price negotiation, land acquisition and fulfilment of other technical aspects of the tender”.
According to their bid documents, the two had also committed to a funding model of 80:20 percent for ZTE and 100 percent for Chivayo’s company.
What this meant was that the contractors will raise about 80 to 90 percent of the funding, while Gwariro’s company will make up the difference.
And as a company, which first brought the solar-farm concept to Zimbabwe in 2013, Intratrek’s vision was to “ameliorate the current power shortages and deficit as well as create massive employment, officials say.
Having secured a 260 hectare piece of land in Gwanda, Chivayo’s company and ZPC are engaged in talks with at least three key international financial institutions namely: China Exim Bank and its developmental peer, and the African Development Bank to finance the project.
And for the project, Intratrek has partnered Chint Electric (Chint), which will also help raise long-term and concessionary capital back in China.
Under the programme, the Shanghai-based giant — with assets in excess of $30 billion — will deploy its technology to produce one MW of power at an average $2,5 million and in an area with proven good solar radiation. The equipment also comes with a 25-year guarantee out of its 50-year life span.
As China’s fourth largest private enterprise, Chint is a market leader in electric voltage distribution products that are also present in over 110 countries.
The 30 year-old Asian company’s annual revenue also average $5 billion and has a 40 percent share of the domestic market supply. Internationally, Chint also employs 29 000-plus people.
By tapping into this renewable and smart energy market, analysts say Zimbabwe could actually be able to plug the skills gap between the southern African country and its partners, and which strategies can also make it the solar hub of the region.