Government is conducting a due diligence of China’s ZTE Corporation, one of three companies awarded tenders to build solar power stations that are expected to feed 300MW into the national electricity grid.
However, some insiders said the State was actually conducting a probe into whether or not the contract was procedurally awarded.
The solar projects in Gwanda, Munyati and Insukamini are estimated to cost a combined US$549 million, with Metallurgical 17 and Intratrek (Private) Limited also awarded contracts.
Although the projects have been in the pipeline since 2014, they have been bogged down by allegations of corruption against senior State Procurement Board staffers and tender processes have been reviewed several times.
Highly-placed sources told The Sunday Mail Business, “Out of the three solar projects, two are going on well while the third one, which was awarded to ZTE, has been stopped by Government because there was a violation of laws during the awarding of the contract. As it stands, nothing is going on there after Government ordered everything to be stopped.”
Efforts to obtain a comment from Zesa Holdings in the last two weeks were fruitless as CEO Engineer Joshua Chifamba asked for written questions to be directed to spokesperson Mr Fullard Gwasira.
Mr Gwasira acknowledged receipt of the questions and promised to respond but later referred this newspaper to the Energy and Power Development Ministry.
Secretary for Energy Mr Partson Mbiriri indicated Government was only conducting a due diligence on ZTE and contract had not been suspended.
“No, it has not been suspended; there are queries about the project, there are queries about ZTE but it has not been suspended.
“A due diligence will be done on ZTE. The other two have had their due diligence and the third on ZTE will be done and then a decision will be made on the project,” said Mr Mbiriri.
Due diligence is the process of assessing a contractor’s competence.
Mr Mbiriri said the ZTE Corporation contract would not be withdrawn as this would unduly delay project implementation.
“Already, we have had sufficient delays so far and any further delays would be unwelcome. There will be a due diligence shortly then we take it from there,” said Mr Mbiriri.
The other two projects are understood to be on track and Intratrek had reached financial closure.
It is understood that a Chinese bank will fund the Gwanda solar project spearheaded by Intratrek and its Chinese partner, Chint Electric.
A feasibility study established that it was viable to construct a 100MW solar plant in Gwanda at a cost of US$202 million starting mid-2016.
Feasibility studies for Insukamini and Munyati are yet to be released.
Mr Mbiriri said he could not reveal the latest about the projects saying he was out of office, and referred further questions to Zimbabwe Power Company MD Engineer Noah Gwariro.
It was not possible to get a comment from Eng Gwariro by the time of going to print.
Mr Mbiriri said Government planned to stagger implementation of the three projects to minimise the anticipated “technical challenges” associated with feeding 300MW of solar energy into the national grid at once.
Zimbabwe enjoys total solar radiation of between 2 500 and 4 000 hours per year, making it deal to invest in solar energy given the challenges being experienced with hydro and thermal power generation.
The biggest drawback to solar energy could be costs as the Gwanda feasibility study recommended a tariff rate of USc18 per kilowatt hour.
Consumers are already at loggerheads with Zesa over its proposed tariff hike to USc14/kWh from USc9,86/kWh. A new tariff in line with regional averages of USc14/KWh is expected in the next few weeks.
The Energy Ministry says a tariff increase is unavoidable as authorities seek to enable Zesa to pay for imported power and generate its own.
By Tuesday, Zimbabwe was generating 1 008MW of electricity (Kariba 425MW, Hwange 531MW, Harare 30MW and Bulawayo 22MW) against demand of 2 200MW.
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