Harare - Zimbabwe plans to build new power stations to generate 3 500 megawatts at a cost of $5 billion, the national power company said, in a bid to end chronic power cuts that have damaged the economy.

Local industries are forced to use costly diesel generators to keep operations running and the electricity shortages have been blamed for keeping away potential investors.

“We are looking at around $5 billion for the various projects and you are looking at more than 3,500 MW (of electricity),” Noah Gwariro, the managing director of state-owned Zimbabwe Power Company (ZPC) said on Thursday night.

“That's over a period of five to six years,” he said referring to the time it would take to build the plants.

Gwariro did not say how Zimbabwe would raise the funds to build the power plants, which amount to more than a third of Zimbabwe's gross domestic product.

Zimbabwe finances its entire budget from taxes because lenders like the International Monetary Fund (IMF)and World Bank have said they will only resume lending to the country once it clears its debts with the global lenders.

The country produces 1 190 MW of electricity compared with peak demand of 2 200 MW, Gwariro said.

He said ZPC is planning a joint venture with northern neighbour Zambia to produce up to 2 400 MW to be shared equally, while also seeking to expand the Hwange power plant in western Zimbabwe by adding 600 MW.

Gwariro said ZPC is also evaluating two bids to generate a total of 420 MW using gas and solar, whose results would be announced by the end of May and June respectively.