Gwanda solar project receives US$14m funding from ATC Holdings
ZIMBABWE : The 100 megawatt (MW) Gwanda solar project has received fresh impetus after a local infrastructure fund, African Transmission Corporation (ATC) Holdings, agreed to extend US$14 million to finance the first 10MW of the project under a phased construction model.
ATC financed the 2.5MW Phase One of the 25MW Centragrid Photo Voltaic project in Nyabira, which entered commercial operations on August 1, 2019 while Phase Two of 22.5MW will commence shortly once funder’s due diligence is completed.
According to the Herald, the financing from ATC presents alternative source of funding for the Gwanda project, which has been delayed by financial resource constraints and also further weighed down by the contractual dispute between the parties, which has spilled into the courts.
This was after the Zimbabwe Power Company attempted to cancel the contract last year, citing breach of contract by contractor, Intratrek Zimbabwe with the latter approaching the High Court to contest the cancellation.
The Gwanda project developers, Intratrek Zimbabwe, said in a letter to project owners, Zimbabwe Power Company (ZPC), that progress on the Centragrid project attested to ATC’s capability to also progress Gwanda, which will be developed in phases.
“Further, the 10MW, upon commissioning, would act as successful precedent upon which financing for the balance of 90MW would be mobilised,” Intratrek said.
While Intratrek had hoped to secure funding for the Gwanda project, which was awarded at an EPC contract of US$172 million, before the contractor revised it down to US$139 million, the strategy fell apart because Sinosure, which guarantees Chinese public loans, cited arrears on earlier State guaranteed loans to Zimbabwe.
Intratrek also claims alternative funding proposals that included using Afreximbank and local pension funds, led by CBZ Bank, also received little favour and support from owners of the project, ZPC.
This comes amid indications that 90 percent of pre-commencement works for the Gwanda solar plant have since been completed and these include ground clearing, fencing, signage, geotech and topographical surveys, feasibility studies, roads, temporary offices and ablution facilities.
“The extent of capital outlay invested in the pre-commencement works makes the project a good candidate to proceed with commencement, especially in light of available offer on funding the first 10MW,” Intratek said.
ATC has proposed that Intratrek Zimbabwe must agree with the amendments to the engineering, procurement and construction contract with ZPC, finalise all licences and permits, contracts, power purchase agreements and leases by end of this month.
It has also recommended that all documentation be submitted to the ATC board by mid next month and that all conditions precedent be fully met by end of December 2019.
ATC indicated that if all is in place, the first draw down could be ready by beginning of February next year.
Source : africaincmag
