China Exim Bank gives Zim $319.5m for Kariba expansion

Published: 11 November 2013

GOVERNMENT and China Export and Import Bank have signed a funding loan agreement for the expansion of Kariba South hydro power expansion project.

Finance and Economic Planning Minister Patrick Chinamasa signed on behalf of Government while China Exim Bank vice president Mr Zhu Hongjie represented the bank.

"Under this arrangement, the bank will provide funding amounting to $319.5 million, representing 90 percent of the total project cost, whilst Government, through the Zimbabwe Power Company will finance the 10 percent balance amounting to $35.4 million," said Minister Chinamasa.

He said energy was a key enabler in any economy adding that without reliable energy supplies, economic turnaround efforts would be fruitless.

The loan will be used for such services as engineering, procurement of equipment and actual construction to be done by the winning bidder - a Chinese firm called Sino-Hydro.

The firm has an option of sub-contracting building of the two units that will add 300 megawatts to the national grid.

Speaking through an interpreter, Mr Zhu said signing of the loan agreement signified a major breakthrough in addressing power shortages in the country.

"Sino-Hydro is one of the top 500 companies in China. It's a very competitive and strong company in China. It is also good quality client of China Exim Bank.

"We strongly believe that this company will be able to complete the project on time and with good quality. We also hope that it will accelerate its construction to ensure that this project will be completed as early as possible to bring benefit to your people," said Mr Zhu.

Zimbabwe Power Company - a subsidiary of Zesa Holdings - last year signed the agreement for the project with Sino-Hydro, an engineering, procurement and construction company.

But a debt of over $25 million owed to China Exim Bank by the Industrial Development Corporation and Farmers World Holdings stalled conclusion of the funding agreement as the two firms were supposed to clear the debt first before new funding.

It is understood the debt was settled recently.
- herald