ZIMBABWE Power Company has proposed to give Sino Hydro a contract to expand Hwange Thermal Power Station after the winning bidder China Machinery Engineering Company failed to demonstrate financial capability to undertake the project.Government, through the Ministry of Energy and Power Development is said to be looking into the issue.
CMEC won the contract ahead of Sino Hydro which had tendered a bid price of $1,1 billion. The expansion of the Hwange is expected to add 600MW onto the national grid.
"Now that there is a board in place, it is hoped the issues will be finalised soon," said one source.
"Since Sino Hydro was the second highest bidder, it was then agreed and a proposal was made to give the contract to Sino Hydro considering the time it was going to take if new bidders were to be invited."
Energy and Power Development Minister Dzikamai Mavhaire said he could not comment because he was out of the country.
ZPC managing director Mr Noah Gwariro was not answering calls seeking comment.
Sino Hydro won the bid to expand Kariba Hydro Power Station in a deal worth about $360 million and implementation of the project has already started. Zimbabwe is battling to ease power shortage in the country in recognition to its critical importance as a key enabler to economic growth as it recovers from the debilitating effects of Western sanctions that ravaged the economy for almost a decade.
Foreign investors, mainly from Asia, have expressed interest in the country's power sector and are looking at generating electricity from solar, coal and methane gas.
Two Chinese companies -- China Jiangxi Corporation and ZTE Corporation -- are among three companies that recently won tenders to build 100-megawatt solar plants in Gwanda at a cost of $184 million each.
Indian state-owned Bharat Heavy Electricals Limited and Shandong of China are among companies that have also expressed interest in partnering RioZim Limited in setting up 250 megawatt plants at its vast coal fields in Gokwe. The short-term strategy envisages the construction of a number of smaller power plants over the next 10 years, RioZim said.
Its energy unit Rio Energy is in the process of bringing in technical and financial partners.
China Africa Sunlight Energy and a leading Chinese bank are discussing terms of a possible loan worth $1,6 billion to fund the setup and construction of a coal mine and a power station in Gwayi.
Zimbabwe produces about 1 200 megawatts against demand at peak periods of 2 200MW. The country also imports an average 300MW from Mozambique. Load shedding has worsened on increased power demand this winter.