News / National
Zimbabwe's Mutapa Fund clinches US$350m power deal
29 Sep 2024 at 14:25hrs | Views
The Mutapa Investment Fund (MIF) has approved a significant joint venture valued at US$350 million between Indian firm Jindal Africa Investments and Zesa to refurbish six units at Hwange Thermal Power Station. This investment is poised to add approximately 400 megawatts (MW) of electricity to Zimbabwe's national grid, providing much-needed relief amid ongoing power shortages.
Zimbabwe is currently experiencing daily load-shedding of up to 16 hours, which has compelled businesses to rely on costly generators, with some corporations reportedly spending up to US$300,000 monthly on fuel. The cost of alternative energy sources has risen to about 50% higher than conventional electricity, exacerbating the economic strain on many businesses.
MIF's CEO, John Mangudya, elaborated on the project during an exclusive interview with the Zimbabwe Independent. He stated, "The Mutapa Investment Fund board has approved the partnership between Zesa and Jindal Africa Investments for the refurbishment of Hwange units 1 to 6 on a rehabilitate, operate, and transfer basis. This public-private partnership will enhance the supply of electricity into the grid by around 400 MW, increasing total capacity to 840 MW from these rehabilitated units."
Funding for the restoration project will come from Jindal Africa Investments, which is a subsidiary of the Indian multinational conglomerate Jindal Steel and Power (JSP). The OP Jindal Group, which has a global valuation of approximately US$12 billion, is involved in various sectors, including steel, power, and mining, and employs over 50,000 people worldwide.
President Emmerson Mnangagwa recently commissioned Hwange Power Station's Units 7 and 8, which added an additional 600 MW to the national grid, through a project undertaken by Chinese firm Sinohydro at a cost of US$1.5 billion. Currently, Zimbabwe generates about 1,267 MW of electricity, with Hwange contributing more than half of this output.
MIF, which has transformed from the Sovereign Wealth Fund, is focusing on boosting investments and addressing the challenges faced by state-owned enterprises (SOEs) in Zimbabwe. The SOEs' contribution to the country's gross domestic product (GDP) has declined from 40% in the 1990s to just 12% in 2021. Mangudya expressed his commitment to reversing this trend, stating that many of these entities are struggling with legacy debts.
In addition to refurbishing Hwange, Mangudya highlighted the importance of diversifying Zimbabwe's energy sources, mentioning ongoing initiatives involving independent power producers (IPPs) and exploring gas as an alternative energy source. "Gas provides a good source of energy," he noted, adding that MIF had approved participation in underwriting Zimbabwe depository receipts issued by Invictus Energy.
MIF, in collaboration with Zesa, is implementing a range of initiatives aimed at mitigating power outages, including the installation of smart metering and prepaid meters to align electricity supply with effective demand. The organization is also enhancing net-metering to facilitate increased electricity supply from private solar sources.
Mangudya, who recently visited India, mentioned that MIF is actively seeking partnerships with Indian firms to bolster Zimbabwe's economic productivity. He emphasized the fund's commitment to good corporate governance and a zero-tolerance policy towards corruption, ensuring that investments lead to tangible improvements in the country's energy and economic landscape.
With key projects underway, MIF aims to revitalize major firms under its purview, including the National Railways of Zimbabwe, Air Zimbabwe, and the Zimbabwe Power Company, among others, as part of a broader strategy to enhance the country's financial performance and infrastructure.
Zimbabwe is currently experiencing daily load-shedding of up to 16 hours, which has compelled businesses to rely on costly generators, with some corporations reportedly spending up to US$300,000 monthly on fuel. The cost of alternative energy sources has risen to about 50% higher than conventional electricity, exacerbating the economic strain on many businesses.
MIF's CEO, John Mangudya, elaborated on the project during an exclusive interview with the Zimbabwe Independent. He stated, "The Mutapa Investment Fund board has approved the partnership between Zesa and Jindal Africa Investments for the refurbishment of Hwange units 1 to 6 on a rehabilitate, operate, and transfer basis. This public-private partnership will enhance the supply of electricity into the grid by around 400 MW, increasing total capacity to 840 MW from these rehabilitated units."
Funding for the restoration project will come from Jindal Africa Investments, which is a subsidiary of the Indian multinational conglomerate Jindal Steel and Power (JSP). The OP Jindal Group, which has a global valuation of approximately US$12 billion, is involved in various sectors, including steel, power, and mining, and employs over 50,000 people worldwide.
President Emmerson Mnangagwa recently commissioned Hwange Power Station's Units 7 and 8, which added an additional 600 MW to the national grid, through a project undertaken by Chinese firm Sinohydro at a cost of US$1.5 billion. Currently, Zimbabwe generates about 1,267 MW of electricity, with Hwange contributing more than half of this output.
In addition to refurbishing Hwange, Mangudya highlighted the importance of diversifying Zimbabwe's energy sources, mentioning ongoing initiatives involving independent power producers (IPPs) and exploring gas as an alternative energy source. "Gas provides a good source of energy," he noted, adding that MIF had approved participation in underwriting Zimbabwe depository receipts issued by Invictus Energy.
MIF, in collaboration with Zesa, is implementing a range of initiatives aimed at mitigating power outages, including the installation of smart metering and prepaid meters to align electricity supply with effective demand. The organization is also enhancing net-metering to facilitate increased electricity supply from private solar sources.
Mangudya, who recently visited India, mentioned that MIF is actively seeking partnerships with Indian firms to bolster Zimbabwe's economic productivity. He emphasized the fund's commitment to good corporate governance and a zero-tolerance policy towards corruption, ensuring that investments lead to tangible improvements in the country's energy and economic landscape.
With key projects underway, MIF aims to revitalize major firms under its purview, including the National Railways of Zimbabwe, Air Zimbabwe, and the Zimbabwe Power Company, among others, as part of a broader strategy to enhance the country's financial performance and infrastructure.
Source - the independent