BPC deal with Zimbabwe almost complete - PHK

Brian Benza
Staff Writer | Friday July 2, 2010 00:00

 

Cabinet's approval paves way for Botswana to invest US$8 million for the resuscitation of the Bulawayo Thermal Power Station, which has been mothballed for close to 10 years due to financial constraints.

In an interview with Business Week on the sidelines of the seventh Botswana Resource Conference held in Gaborone this week, Minerals, Energy and Water Resources minister Ponatshego Kedikilwe said cabinet has approved the intergovernmental Memorandum of Understanding (MOU) and it should be signed within the next two weeks.

'We have just finished our MOU and it has been cleared by cabinet. I expect my counterpart in Zimbabwe to finish theirs sometime this week. After that I will then travel to Zimbabwe to sign the agreement.

'There have been some reports that we have been dragging our feet on this transaction but that's not true. We need the 40 MW. Mind you we also had to clear a facility for Hwange colliery so that there will be enough supply of coal at the Bulawayo Thermal power station,' he said.

From the US$8 million, which BPC will provide, US$4.5 million will be used in the refurbishment of the plant while US$3.5 million will be used to purchase the coal.

The inter-governmental MOU is expected to be followed by the signing of another MOU between the two power utilities BPC and Zimbabwe Electricity Supply Authority (ZESA). The Bulawayo power station will be expected to produce 90 MW.

The joint venture project between ZESA and BPC to revive Bulawayo's thermal power station has been on the cards since October 2009 when the two sides started negotiating the accord.

The deal is similar to the one agreed upon in 2008 with Namibia's utility NamPower, which allowed the Windhoek-based company to invest US$45 million to rehabilitate Hwange in exchange for electricity.

Both Zimbabwe and Botswana have been experiencing serious power shortages in the recent past, following the decision by South Africa to scale down its power exports, compelling Botswana to turn to the costly diesel-powered emergency power plants.

The government has funded construction of two diesel power stations - one in Orapa, the other at Matshelagabedi - which will generate 160MW from a diesel consumption rate of 292, 000 litres and 50, 000 litres respectively for a maximum of eight hours a day that the power-picking plants can run for.

Botswana is also importing power from Snel in DRC and HCB in Mozambique although supplies are erratic as they only come when the two countries have extra power.