Energy minister Dzikamai Mavhaire said the tender for the expansion of the Hwange power station had been awarded initially to China Machinery and Engineering Company (CMEC).
"CMEC however failed to conclude the contract within the stipulated time frame that they had agreed upon with the Zimbabwe Power Company and the government of Zimbabwe,hence,the tender was cancelled in May 2014," he said.
Sino Hydro's bid for the project was the next best, Mavhaire said.
Zimbabwe experiences power shortages owing to low electricity production resulting in regular outages in households and industries.
The Zimbabwe Electricity Supply Authority (ZESA) generates 1,300 megawatts against a demand of 2,100 megawatts.