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Harare - Standard Bank has advanced a $120million (R1.5billion) debt package to enable the Zimbabwe Power Company to rehabilitate power-generating infrastructure at the country’s two biggest power stations.

The money will be used to rehabilitate infrastructure at the Hwange thermal and the Kariba South hydro power stations.

“This funding will assist in improving access to power for Zimbabwe and Namibia, and in the medium to long term, benefits of improved power-supply and reliability will also extend to other Southern African Power Pool (SAPP) members.

“The proceeds will be applied to significant capital expenditure which will increase capacity and improve the efficiency of the power stations,” said Tandiwe Njobe, the regional head for investment banking at Standard Bank.

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Standard Bank has operations across Africa. The bank said it negotiated the deal with government officials in both Zimbabwe and Namibia.

It said the facility has a long-term repayment period and feeds into the Power Purchase Agreement between ZPC and Nampower, the Namibian power utility.

The electricity agreement between Zimbabwe and Nampower “provides a long-term and sustainable cash-flow stream to ZPC, enabling the entity to raise further funding for new projects and for the rehabilitation of existing infrastructure” at its power stations, officials added.

President Robert Mugabe’s government has also embarked on upgrades at the Hwange and Kariba plants, while also awarding contracts for independent power producers although most of these have not yet taken off.

Zimbabwe has huge power shortages that have prompted it to rely on imports from Eskom and Mozambique’s Cahora Bassa. However, it has run up debts with the producers and has been threatened with blackouts.

Eskom has written to the Zimbabwe Power Company threatening to cut it off over outstanding bills, raising fresh concerns of possible blackouts.