Court battles stall 100MW Gwanda solar project

THE 100-megawatt Gwanda Solar Project remains in limbo due to continuing legal battles between the contractor, Intratrek Zimbabwe and developer, Zimbabwe Power Company (ZPC).

The project has courted controversy over the last few years after Intratrek Zimbabwe owned by Harare businessman Wicknel Chivhayo, could not deliver within the agreed timelines.

While ZPC has blamed the contractor for failing to meet its end of the bargain, the contractor has cited outstanding sovereign debt to China as the stumbling block in raising project funding.

The project, awarded to the lowest bidder to specification, was won by Intratrek Zimbabwe at an initial cost of US$173 million, but the company has agreed to cut the price to US$140 million on account of falling cost of solar driven by technological developments.

Following delays caused by endless legal wrangles, Cabinet last year approved the revised implementation plan for the project that commits to deliver the first 10MW and 90MW by year 2022 after signing of financial closure agreements and fulfilment of all outstanding conditions.

Despite this proposed working plan to fast-track the implementation of the project, further action is dependent on pending court outcome, secretary for Energy and Power Development, Dr Gloria Magombo, said.

While the project remains on ice due to the legal wrangling, Zimbabwe faces a debilitating power crisis, with peak demand at 2 200MW far outstriping supply of about 1 400MW.

A study shows that the deficit could grow significantly by 2023 to about 4 000MW driven by demand from new mining projects including by Great Dyke Investment, Monachrome, Zimasco, Murowa, Zimbabwe Zhongxin Smelting, Karo Investment and How Mine to name but a few.

“Gwanda Solar project is at a standstill. The project effectively did not progress into actual power plant units’ installation as the employer (ZPC) terminated the EPC contract on the basis of failure to timeously complete pre-commencement works,” said Dr Magombo in a recent interview.

“The project is faced with legal challenges as the contractor is challenging the employer’s termination of the contract. Further action on the project awaits the outcome of the court processes.

“At the moment all I can say is that Zesa management is studying the latest court decision with regards to some of the issues, which were related to abuse of funds related to the project.

“So, we’ve left that to management to then advise the Government in terms of how to proceed.”

Following last year’s Cabinet approval of the new implementation plan, the Gwanda project will have to be tied to a new contract, see involvement of renowned power project experts.

A local infrastructure fund, African Transmission Corporation, has already committed US$14 million “ready-made” loan funding to finance delivery of the first 10MW under the new phased project plan.

ATC financed the 2,5MW Phase One of the 25MW Centragrid PhotoVoltaic 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.
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Under the new financing framework Intratrek has been asked to declare its financial capacity before embarking on the project, which will be done in two phases.

Justice Tawanda Chitapi, ruling on the contractual dispute between Zesa and Intratrek over delays in implementation of the project, pointed out that electricity was not generated in courts and boardrooms, but at power stations and urged the feuding parties to dialogue and stop being “dilatory” in their approach.

Contacted for comment, Intratrek executive chairman Wilson Manase said “The Gwanda Solar Project was approved for immediate implementation by Cabinet on June 30, 2020.

“The approval was premised on the need to immediately improve power supplies to meet a spiking demand in capacity caused by increased production in the mining and agricultural sector. More importantly, the Cabinet’s position was arrived at with a view to compliment and fulfil the Government’s vision 2030 and objectives under the National Development Strategy (NDS1) .

“Immediately thereafter, Intratrek and ZPC engaged each other over a series of negotiations which birthed an Amended and Restated EPC Contract. The contract now awaits signature by both parties “Despite Cabinet’s directive, parties have not been able to resolve a dispute between them in court. We believe the dispute is capable of resolution outside the confines of litigation and look forward to all stakeholders to the project finding a common solution in the
interest of the nation.

“More importantly, there have been various directives to ZESA which legally require them to conclude the matter out of court. We look forward to this process being observed and concluded accordingly.
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“As Intratrek, we reaffirm our readiness to implement the contract upon its conclusion.
Financing for the project is available as well as the technical expertise. We therefore have no reason not to add 100MW to the grid beyond 18 months from signing the amended contract,” Mr Manase said.

Vice President of Chint Electric, the technical partner to the Gwanda Solar Project, in charge of engineering procurement and construction contracts in Africa, Wang Jin said at a time when Zimbabwe had been experiencing protracted debilitating power outages, the Gwanda 100MW photovoltaic power generation project remained the nation’s single most important quick win in the energy sector.

“All that’s required is some willpower from all to focus on the core deliverable of clearing Zimbabwe’s power generation deficit to attain vision 2030 . So the employer only has to sign off the agreement as all technical and commercial negotiations have been completed. This is the easiest way to generate energy .

“Court processes will not guarantee attainment of vision to attain middle income status by So as Zimbabwe continues to be under siege from the unjustified economic sanctions we as Chinese all weather friends implore upon Zesa Holdings to open a new page in its dealings with us so that we can deliver on our contractual obligations in respect of this project,” he said.

Dr Magombo said it was unfortunate that the Gwanda Solar Project had been controversial from the beginning as it was not managed properly from a management point of view. She, however, said the Government was not sitting back because of the failure of one project, which was not managed well.

She said within Gwanda there was another 5MW solar project, which is already being implemented and is expected to feed power to the national grid next year.

Dr Magombo said a transmission line from the new project was already being installed while a similar project was being undertaken near Victoria Falls International Airport.

Recently, another 5MW solar project was commissioned at Cross Mabale near Hwange and is already supplying power to the national grid.

Energy and Power Development Minister, Zhemu Soda, is on record saying despite the false starts, the Gwanda Solar Project was one of his priority projects.

“Government is pushing for the implementation of the project hence the Cabinet has directed Intratek and Zesa Holdings to engage and bring the project back on track,” he said.

Zimbabwe requires about 2 200MW a day during peak demand, especially in winter, but is generating about 1 300MW with the deficit being covered by imports.-The Herald