Zim, Chinese ink $4bn energy deal

HARARE - Energy secretary Partson Mbiriri has signed a memorandum of understanding with a Shanghai Electric (Shanghai)-led group for electricity generating projects countrywide.

This comes as Zimbabwe grapples with an acute power shortage and the consortium has unveiled plans for the construction of a $4 billion coal-fired plant in north western Zimbabwe.

“We are short of energy in an economy that is underperforming (and) … a country short of power when our mining industry is beginning to recover,” he said.

“All these sectors need power and investors… are most welcome. The country is actually anxious for investment… (and) this investment by Shanghai will go a long way (to alleviate power problems,” Mbiriri said at the signing ceremony and where plans for the north western Zimbabwe plant was officialised.

On the other hand, Shanghai chairman Zheng Jianhua said his three-member consortium was ready to  “provide equipment and start the construction of projects” on condition that land acquisitions, and financing agreements were concluded.

“We are only waiting for the relevant approvals to set the ball rolling. The plant will begin at a 300 MW capacity and increase to 1 200 MW, and beyond as the phases progress,” he said on Wednesday.

Earlier, Jianhua had told financial news platform BusinessLive, that: “We are an engineering, procurement and construction supplier, and a key utility in the world. (In relation to the local project)… the financing model is going to be discussed with the finance minister.”

According to the Shanghai boss, the build, operate and transfer venture would operate under the banner of Shanghai Electric Southern Africa and which group included Nan Jiang Company Limited and Shenergy, and given the size or magnitude of the project it was likely “to get support from the Beijing government”.

To pursue the independent power-producer project, the group has roped in ex-CBZ Holdings Limited chief executive Nyasha Makuvise’s Elbtree Capital (Elbtree) to be its technical advisor.

Just as Nan Jiang Southern Africa chairman Jonathan Kadzura announced on Tuesday that they were aiming to “export power to the region upon utilising coal reserves” in Matabeleland North, company president Eric Wang said funding for the project was already in place.

“The current state (of your power) is in a sorry state. This is not just a verbal agreement, but we are just waiting for the relevant approvals to move in,” he said.

Wang had earlier in the week said they were hoping to export power to Mozambique and Zambia – under an arrangement with the Zimbabwe Electricity Supply Authority.

Group chairman Wu Jianxiong had also said “if Zimbabwe wanted to escalate the progression of its ZimAsset (Zimbabwe Agenda for Social and Sustainable Transformation), then it must sort out its power issues”.

The Shanghai investment also comes as several other investors, including China Gezhouba Group Corporation, Essar Africa Holdings and Makomo Resources, have announced plans to build power stations in the country.

According to Kadzura, the billion dollar project was in line with Mugabe’s infrastructural deals signed in Beijing three weeks ago.

Meanwhile, the investment group said at a Tuesday presser that it was also involved in an initiative called the Zimbabwe Financing Platform (ZFP) and to harness capital for Harare.

Makuvise said the fund was based on an equity financing model and where investors “would take their own risks in investing in a few selected projects”.

“The model (ZFP) is not based on borrowings and (we are) looking at projects of an export nature,” the Elbtree boss said.

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