HARARE - Zimabwe has begun negotiations with China’s biggest state-owned insurance company aimed at operationalising infrastructure deals brokered between the two countries last year.
The China Export and Credit Insurance Corporation (Sinosure) chairman, Wang Yi, on Monday told the Finance minister, Patrick Chinamasa, that the insurers’ cover was dependent on the country’s ability to raise money for the projects.
“In the meeting, government acknowledged previous Sinosure insurance cover for the Ziscosteel facility, agricultural equipment and machinery, supply of medical equipment and supplies and rehabilitation and development of municipal water and sewage treatment works,” Chinamasa said.
Sinosure is a state-owned insurance firm mandated with providing insurance cover for Chinese exports and credit facilities offered to overseas clients by Chinese institutions.
Yi, who held a closed door meeting with Chinamasa, said Sinosure would cover a number of loan facilities which fall under the China-Zimbabwe Mega deals.
Yi’s visit is in the wake of the “multi-billion deals” in different sectors of the economy which were brokered by Mugabe during a similar visit to the Asian giant last year.
According to President Robert Mugabe, the deals are all part of government’s ambitious economic blueprint Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset), which requires approximately $27 billion capital.
During his visit, the nonagenarian leader signed a Memorandum of Understanding with Sinosure.
Chinamasa said Zimbabwe was prioritising energy cooperation with China to plug energy shortfalls that have affected economic growth.
“At the forefront of government’s priorities with regard to further cooperation with Chinese financial institutions is energy, also against the background of regional power deficit across the region,” Chinamasa said.
Zimbabwe faces perennial power shortages due to obsolete equipment, and is currently producing half of its 2200 megawatts (MW) energy requirement.
Government contracted Chinese firm Sino hydro to expand the second largest power plant, Kariba Hydro Power Station, by 300 MW. The Chinese-funded project began in 2014 and is scheduled for completion in 2017.
Sinosure provided insurance cover for the project.
Sino hydro has also been contracted to expand the biggest power plant Hwange Thermal Power Station.
Sinosure has previously provided insurance cover for several loan facilities to Zimbabwe covering the country’s now defunct steelmaker Ziscosteel, agricultural equipment and machinery, supply of medical equipment and rehabilitation of municipal water and sewage treatment works, among others.
This comes as reports indicated that Sinosure had refused to guarantee loans from Chinese banks to Zimbabwean companies on the back of government’s failure to repay over $60 million arrears already owed to China.