RioZim says it has has signed outline agreements with funders for the long-delayed 2800MW Sengwa Power Project, and plans to begin work on the first phase within 12 months.
In its annual results for 2018, RioZim, which operates gold and diamond assets in Zimbabwe, said it has signed “binding exclusivity and framework agreements with a renowned international player and investor in respect of its Sengwa Coal Mine resource which will see the commencement and ground-breaking ceremony of the Sengwa Power Station Project in the near future”.
The company does not mention the “international player”, but industry officials believe it to be Power China, whose subsidiary SinoHydro has already completed construction of a new 300MW power unit at Kariba and has begun expansion work to add 600MW at Hwange.
RioZim says it has “ambitious” plans to start the project within a year.
“The Group made strides in the Sengwa Power Station Project which entails the development of a 2 800MW power station in phases of 700MW each. As the project gained significant traction during the year under review, the Company has now set ambitious targets for 2019 which will culminate in the project kick off in the next twelve months,” RioZim reported.
RioZim has tried for years to find a partner to launch the Sengwa energy project, which has been on the table for decades. The area has proven coal reserves of 1.3 billion tonnes, but these have remained unexploited as Zimbabwe struggled to attract investment. However, last year, RioZim reported that it had begun receiving letters of interest from potential investors.
In December, RioZim announced that Spanish-Japanese company Univergy International announced would build 180MW of solar power generation capacity to supply electricity to its mines. Univergy is to partner RioEnergy, the RioZim energy arm that is backed Denham Capital, a resources and energy-focused global private equity firm.
Zimbabwe is looking to build more power capacity. Zimbabwe currently produces 1200MW, short of peak demand of 2200MW. In February, Zimbabwe and Zambia moved closer closer towards construction of the Batoka Gorge hydro power station after shortlisting American, European and Chinese companies to build the 2400MW plant.