Chinese bank pledges to lend $950 million for the First Phase of the 600MW PER Lusulu Power Plant Project

On 24 July, 2015, the contract was signed for the First Phase of the 600 MW PER Lusulu Power Plant (also known as Binga Power Plant). A $950 million loan would reportedly be provided for the project. It is unclear if the financier would be China Eximbank or the Bank of China. The loan has a 15 year maturity with 7% interest. The implementing agency is China State Construction Engineering Corporation (CSCEC,中国建筑股份有限公司), and the beneficiary is ZPC (津巴布韦能源公司). The Chinese project name is 津巴布韦能源PER Lusulu Power600MW煤电厂项目. The project is planned to start in April 2016 and end in 2019. PER Lusulu is developing an integrated 350MW supercritical thermal power plant, located in Binga District Matabeleland North Province of Zimbabwe to supply electricity to the Zimbabwe National Grid. The project is approximately 305km to the north South cross-border Central Transmission Corridor. ZETDC’s grid impact studies require PER Lusulu to connect to this corridor at the Alaska Substation. The PER Lusulu Power Company is targeting financial close by Q2 of 2020 and commissioning of the power plant by the end of 2023 and commencing commercial operations by Q1 2024. The development of the PER Lusulu Power Plant Project will see a substantial investment into the Binga District, generating domestic revenue streams, stimulating regional development, creating employment opportunities and strengthening and diversifying the country’s production and export base. This large scale project will be developed in 4 phases, starting with a 350MW Ultra-Supercritical integrated power plant, expanding ultimately to a 2100MW power plant in three by 700MW modules. The Feasibility Study was conducted by Pro-Consult, independently reviewed by ARUP and in association with numerous specialist sub consultants. The project has entered into an engineering, procurement and construction (“EPC”) contract with China State Construction Engineering Corporation. CSCEC are ranked 27th in Fortune 500 and have the balance sheet to bring the required debt finance via Sinosure Buyers Credit Facility with Bank of China. The Company is targeting a nominal equity IRR of at least 15% from estimated net equity cash flows. According to the Global Energy Monitor, in December 2019, PER Lusulu's website said the power project "has made significant progress towards achieving financial close" with both financial close and construction targeted for H2 2020, and commissioning by H2 2023. As of June 2020, construction has not yet begun.

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