News / National
Mugabe pushes for power generation funding from China
27 Aug 2014 at 10:15hrs | Views
The Zimbabwe government has tabled a number of power generation projects for funding by China as it prioritises energy as a key enabler for resuscitating the economy, Finance and Economic Development Minister Patrick Chinamasa said on Tuesday.
Addressing journalists after signing agreements that will lead to discussions on funding by the Chinese government and private companies, Chinamasa said Zimbabwe tabled a number of power generation projects for consideration.
"We put on the table projects in the power generation which as you know is our top priority. We need to arrive at a situation where we have industries, mining, all sectors enjoying uninterrupted power supply," he said.
Chinamasa said power projects Hwange 7 and 8 and Gwayi thermal station, which will produce 1 200 megawatts of electricity, topped discussions between Zimbabwe and China.
"At the moment we run a deficit in power generation so we put on the table priority projects in the power sector and these are Hwange 7 and 8 and these will be a government project where we will secure a loan to develop a power station that will generate 600 megawatts into the national grid."
"We also put on the table a private sector driven thermal power station, that is the one to be implemented through a joint venture company called China Sunlight Energy, which is in the Gwayi area near Lupane."
"The project will then use the coal to build and feed into a $400 million thermal power station which when completed will generate 600 megawatts into the national grid," he said.
Another energy agreement was also signed between Hwange Colliery Limited and Afrochine for the purchase of coke and investment of coke oven batteries and development of Alaska-Sherwood transmission and distribution project as well as development of Sebungwe thermal power stations
The power generation agreements are part of 13 agreements signed on Tuesday between Zimbabwe and China.
Others are between Zimpost and Huawei for electronic networking of post offices, Huawei and Zimbabwe Broadcasting Services for feasibility studies on digitalization, joint venture on dualisation of the Mutare-Harare highway, joint venture for establishment of a cement production plant in Mberengwa, as wwell as construction of the Harare-Mutare railway line.
Chinamasa said they had also signed for the $218 million loan towards NetOne to expand their coverage of telecommunication that would result in the expansion of the mobile network operator's network coverage.
He also requested China Export and Credit Insurance Corporation to give insurance to a loan of $98 million from China Exim Bank to TelOne in order for them to expand fibre optic programmes.
"In this regard, I have committed Treasury to take over a legacy debt of $359 million so that the TelOne balance sheet is cleaned up to make it more attractive to the suitors who might want to advance funding to the company. I have already communicated this message to China Export and Credit Insurance Corporation and also to China Exim Bank that when they deal with TelOne they should do without the $360 million legacy debt."
The agreements were signed following meeting between President Robert Mugabe and Chinese leader Xi Jinping in Beijing.
President Robert Mugabe is in China seeking economic cooperation between the two countries.
Zimbabwe, which has close ties with China, is seeking Beijing's financial assistance to stabilise and grow its economy.
Economic infrastructure development involving projects such as power, telecommunications and transport are top on the agenda.
Zimbabwe presently faces a power deficit, and this has been identified as one of the top priority areas for the government in its bid to resuscitate the economy.
Already two Chinese contractors are involved in power development projects in Zimbabwe at a cost of around $1 billion.
When the three projects come on stream Zimbabwe is expected to be self-sufficient in electricity but much more will be required in the future when the economy starts growing sustainably.
Addressing journalists after signing agreements that will lead to discussions on funding by the Chinese government and private companies, Chinamasa said Zimbabwe tabled a number of power generation projects for consideration.
"We put on the table projects in the power generation which as you know is our top priority. We need to arrive at a situation where we have industries, mining, all sectors enjoying uninterrupted power supply," he said.
Chinamasa said power projects Hwange 7 and 8 and Gwayi thermal station, which will produce 1 200 megawatts of electricity, topped discussions between Zimbabwe and China.
"At the moment we run a deficit in power generation so we put on the table priority projects in the power sector and these are Hwange 7 and 8 and these will be a government project where we will secure a loan to develop a power station that will generate 600 megawatts into the national grid."
"We also put on the table a private sector driven thermal power station, that is the one to be implemented through a joint venture company called China Sunlight Energy, which is in the Gwayi area near Lupane."
"The project will then use the coal to build and feed into a $400 million thermal power station which when completed will generate 600 megawatts into the national grid," he said.
Another energy agreement was also signed between Hwange Colliery Limited and Afrochine for the purchase of coke and investment of coke oven batteries and development of Alaska-Sherwood transmission and distribution project as well as development of Sebungwe thermal power stations
The power generation agreements are part of 13 agreements signed on Tuesday between Zimbabwe and China.
Others are between Zimpost and Huawei for electronic networking of post offices, Huawei and Zimbabwe Broadcasting Services for feasibility studies on digitalization, joint venture on dualisation of the Mutare-Harare highway, joint venture for establishment of a cement production plant in Mberengwa, as wwell as construction of the Harare-Mutare railway line.
He also requested China Export and Credit Insurance Corporation to give insurance to a loan of $98 million from China Exim Bank to TelOne in order for them to expand fibre optic programmes.
"In this regard, I have committed Treasury to take over a legacy debt of $359 million so that the TelOne balance sheet is cleaned up to make it more attractive to the suitors who might want to advance funding to the company. I have already communicated this message to China Export and Credit Insurance Corporation and also to China Exim Bank that when they deal with TelOne they should do without the $360 million legacy debt."
The agreements were signed following meeting between President Robert Mugabe and Chinese leader Xi Jinping in Beijing.
President Robert Mugabe is in China seeking economic cooperation between the two countries.
Zimbabwe, which has close ties with China, is seeking Beijing's financial assistance to stabilise and grow its economy.
Economic infrastructure development involving projects such as power, telecommunications and transport are top on the agenda.
Zimbabwe presently faces a power deficit, and this has been identified as one of the top priority areas for the government in its bid to resuscitate the economy.
Already two Chinese contractors are involved in power development projects in Zimbabwe at a cost of around $1 billion.
When the three projects come on stream Zimbabwe is expected to be self-sufficient in electricity but much more will be required in the future when the economy starts growing sustainably.
Source - Xinhua
