Zimbabwe has closed a US$1.4bn funding project for a 600MW coal-fired expansion project at Hwange, drawing on financing from China and other partnership with Standard Bank and Utho Capital among other participants
The southern African country experiences power deficits that often cripple industry and manufacturing. But the situation has somewhat improved, thanks to power imports from South Africa and Mozambique as well as rising water levels at the Kariba Dam which feeds into a large hydro-power plant there, according to a report in Independent Online.
The other corporate and government partners that worked on the deal and funding structure for the project include Chinese and Zimbabwe government officials, the Zimbabwe Power Company and Afreximbank. China’s Eximbank contributed about US$1bn of the funding for the project.
Sinohydro Corporation, another Chinese company, which will undertake construction of the project, KPMG, Bay Harbor and Norton Rose Fulbright are also among participants to the deal.
Zimbabwean President, Emerson Mnangagwa confirmed that financial draw-down for the project has already commenced. This follows Mnangagwa’s visit to China for a state visit earlier this year.
“When we went to China, we were given a loan facility of around US$1bn for Hwange 7 and Hwange 8 whose draw-down will begin this week. In the process we have created jobs for over 1,000 people,” Mnangagwa added.
The Hwange expansion project will be constructed over a period of up to three years and will supply an additional 30 per cent to the country’s generation capacity.
An official who has worked on the project said the arrangement was a “significant milestone in Public-Private Partnership” undertaking for Zimbabwe, which is desperate for key funding to prop up its economy.
The power supply in Zimbabwe currently stands at 1,200MW against peak demand of about 1,600MW, leaving a supply gap of about 350MW.
