Chasi pushes for Gwanda solar project

The Gwanda solar project remains one of the priority projects for the Government in its quest to make the country energy self-sufficient.

Energy and Power Development Minister Fortune Chasi recently wrote to ZESA Holdings directing it to find a lasting solution with the contractor working on the project — Intratrek Zimbabwe — so that the country can tap power from the venture in the shortest possible time.

In an interview, Minister Chasi said the country could not afford the relentless legal wrangles around the 100MW Gwanda solar project, especially at a time when it was facing power shortages.

“People are confusing two things: there is the prosecution side; I have nothing to do with it, I am not interested, I have not ordered anyone not to be prosecuted; I do not have the power and the Prosecutor-General is seized with that,” he said.

“All we have said is that we cannot tolerate ZESA being in court for more than five years without the power project going on. Government is the sole shareholder there and I have a mandate, as Energy Minister, to deliver sufficient power.”

The High Court, he said, previously directed the parties to “sit down and discuss”, but it seems they were squandering precious time and resources squabbling over the issue.

“And the period that the contractor is suggesting is six months. If I can get 10MW in six months, I would be very happy instead of spending 10 months with nothing and enriching lawyers — it is pointless,” he said.

Time

Minister Chasi says it is pragmatic to negotiate with the current contractor rather than terminate the contract and refloat the tender, a process that was likely to take an inordinate amount of time.

“Gwanda started in 2012 and so we have already lost a lot of time already and the country does not have power. We cannot have the luxury of (shuttling) between courts.

“The appetite to resolve the matter is not there at ZESA.

“I cannot and I will not just sit and watch these people playing games with this project. Gwanda has no power . . .”

It was also encouraging, he added, that pre-commencement works, for which the contractor received payment but had initially not done all the work, had finally been completed.

New plan

Government is now bullish about the project, especially after a new project implementation and financing matrix to be overseen by reputable individuals with extensive experience in contract execution was developed, he said.

The new implementation plan includes a new financing model driven by consultants — African Transmission Corporation (ATC) — who recently delivered a photovoltaic power plant in Nyabira, Mashonaland West.

A new project implementation team had been constituted comprising some experienced legal minds.

Added Minister Chasi: “Should we completely ignore the fact that experts like Victor Utedzi (African Transmission Corporation), who recently delivered 5MW through a photovoltaic centre grid in Nyabira, have promised that within six months they will deliver the first 10MW.

“Should we instead start a new process that will take no less than 18 months before work begins, making it effectively 7 years?”

A meeting of all the senior management of ZESA and Zimbabwe Power Company (ZPC), ZESA’s generation arm, which included the entities’ chief executive and managing director, respectively, was reportedly held on May 22, 2020 to discuss the proposed new plans for the project.

The meeting sought to discuss the formative steps towards thrashing out fresh terms of an amended EPC contract to replace the existing one, which has been the subject of an ongoing legal dispute.

Dispute

ZESA, through its generation unit ZPC, has since 2017 been involved in a bruising contractual dispute with the contractor after terminating the contract for Gwanda solar project over missed timelines.

Intratrek approached the courts for recourse.

Minister Chasi said ZESA and ZPC were already in contempt of High Court judgments passed by Justice Chitapi, which directed the parties to sit down and find an amicable solution to the wrangle.

“It is hoped that key projects like the one involved in this case are not stalled by unnecessary bickering and extra contractual frustrations and parties should desist from merry-dancing in the courts of law and fighting in boardrooms instead of implementing this project of national importance at the site,” Justice Chitapi ruled.

Funding

Funding is also reportedly now available for delivery of the first 10MW of solar energy within six months, which will benefit over 30 000 residents of Gwanda under a phased development of the project.

The prospective financier, African Transmission Corporation (ATC), has been playing a pivotal role in the debt/equity structuring for the ongoing US$1,4 billion 600MW Hwange 7 and 8 expansion project,  which is now over 30 percent complete and US$500 million Kariba South for 300MW.

ATC recently successfully commissioned a 5MW photovoltaic centre grid at Nyabira, which is now feeding the national grid.

Presidential Advisory Council (PAC) chairperson and lawyer Mr Edwin Manikai is reportedly now leading the legal conscription of the financial and technical variation of the amended project contract for Gwanda through Dube, Manikai and Hwacha Legal Practitioners.

Mr Wilson Manase has also been appointed the new executive chairperson of Intratrek Zimbabwe.

Government, Minister Chasi said, believes in the capacity of CHiNT Electric — a Chinese electrical engineering firm that has been contracted to execute the project.

The Shanghai Stock Exchange-listed firm has an asset base of US$12 billion.

He added: “At the revised (EPC) price of US$139 million (from US$173 million initially), the debt/equity model will be less rigorous and financial closure will be reached expeditiously.”

The revised lower EPC contract price is in tandem with declining cost of building solar power plants, as technologies continue to evolve with cheaper ones coming through.

Source: Sunday Mail

Post Author: Chido Luciasi

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