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The Zimbabwe Energy Regulatory Authority (ZERA) has approved Zimbabwe Electricity Transmission and Distribution Company's (ZETDC) proposal to buy electricity from the Dema diesel emergency power plant at a cost of US$15.45 cents per kilowatt per hour
With this move, the public power utility Zesa Holdings will pay Dema US$83mn (about US$7mn annually) for the 536GWh/year to be supplied. This is a premium of 55 per cent over what consumers are currently paying to Zesa for electricity.
The 200MW emergency plant, located 50 km East of Harare, will be spearheaded by local firm Sakunda Holdings. The plant is expected to start adding 100MW to the national grid by next week.
The Dema project is one of the stop gap measures put in place by the Zimbabwean government to address power shortages that hit the country at the end of last year due to declining water levels at Kariba Dam. In efforts to avoid load shedding, government granted ZESA permission to implement emergency power plants, including the Dema project.
ZERA chief executive engineer Gloria Magombo confirmed the tariff in a letter written to Sakunda Holdings founder and chief executive Kudakwashe Tagwirei last week. She also mentioned that ZERA consulted and received concurrence from the minister of energy and power development with regards to approved tariff in accordance with Section 53 (1) of the Electricity Act.
The costs of establishing the plant are being met by the contractor, Sakunda Holdings. It was reported that Sakunda will be lease generators from the temporary power generation company, Aggreko, for the project.