The UK utility National Power has been granted exclusive negotiating rights with the Zimbabwe Electricity Supply Authority (Zesa) and Rio Tinto Zimbabwe by the government of Zimbabwe, Reuters reports, to develop a 1400 MW power plant.
National Power, which intends to invest around $400 million for a 60 to 80 per cent stake in the project, will operate the plant with Zesa, which is expected to take a 20 per cent share. The UK company claims the power station could supply up to one third of Zimbabwe’s electricity demand.
The power station is to be built at Gokwe, in the northwestern part of Zimbabwe. Coal for the fossil fuel fired project will be supplied from a new open cast mine to be developed by Rio Tinto alongside the generating station. The region has proven reserves of 500 million t of low sulphur coal.
The power station is expected to comprise four 350 MW units. The first three of these are due to become operational by 2004. Output from the plant is to be sold to Zesa under a 25 to 30 year power purchase agreement.
The project will be financed with a 70:30 debt to equity ratio. National Power expects to raise commercial loans and attract support from export credit agencies.
Financing is expected to be completed in the 1999/2000 financial year.