ENERGY company Grid Africa has agreed a deal with a group of miners in Zimbabwe to build 200 megawatts (MW) of solar power for their operations at a cost of approximately US$180 million, businessdigest can reveal.
Zimbabwean miners are desperate for alternative energy to power up the operations and expand, at a time when power utility Zesa Holdings has struggled to meet demand.
Just recently, the Chamber of Mines of Zimbabwe (CoMZ) disclosed that power blackouts have led to a US$500 million revenue loss for mining companies in the country.
“Today, in Zimbabwe, we are focusing on developing 200MW for the mines,” Grid Africa CEO Norman Moyo told businessdigest in an interview on the side-lines of the Zimbabwe-Zambia Energy Projects Summit held in Victoria Falls this week.
“The mines need 200MW worth of power, and we have now concluded a deal to supply that power to the mines. A 200MW (project) require anything up to US$180 million. That is the level of investment you need to put in. We have got a number of strategic partners — our banking partners who are coming through. We have got equity investors and development agencies coming through to support us to develop these mines.
“We have already commenced. You will start to see, over the next three years, all that 200MW (project) beginning to come online. However, we do it in (phases). For us, we are very happy to do a 20MW mine and we move on to the next mine.
“Those are smaller projects, quick (and) easy to execute, but they add up very quickly. So that is how we are going to be rolling out that. We are not going to build one big plant. We don't think it is the most efficient (way to do it).”
During the summit, the company signed a landmark deal with Africa GreenCo Group to generate 100MW of electricity for mines in Zimbabwe.
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Under the agreement, Grid Africa will produce the power, while Africa GreenCo Group will handle delivery to mines.
“Mines need more affordable power for them to continue to be viable and profitable,” Moyo said after signing the deal.
“We are working with a number of mines, almost all the top 20 exporting mines. Firstly (to) generate power within their premises and then be able to work with GreenCo to do the offtake.”
According to Moyo, securing bankable partners has been a significant challenge in finalising deals in Africa.
Lion Mashiri, director at Africa GreenCo Zimbabwe, said the 100MW project will roughly cost US$70 million.
“This project will be on land in the Midlands Province around Kwekwe. It will be done at the farm surrounding Zimasco,” Mashiri said.
Grid Africa recently partnered with Huawei, a global technology leader, to develop 72MW of tailored solar power infrastructure for Zimbabwe's mining sector.
With eight years of operational experience in Zimbabwe, Grid Africa has successfully developed over 60MW of power. The company has also expanded its presence to Kenya, Zambia and South Africa.
Separately, during the summit, Africa GreenCo Group signed an additional agreement with JCM Power to generate 30MW of electricity.
The cost of power is the biggest expense for miners in Zimbabwe, following a 40% increase in tariffs last year, according to CoMZ.
Miners state that electricity accounts for an average of 20% of the stay-in-business capital budget for mining companies.
