Deals worth $1,1bn signed during Chinese leader’s visit – Zimbabwe

HARARE,– Zimbabwe’s government signed energy and telecommunications deals worth about $1,1 billion during Chinese President Xi Jinping’s visit earlier this week, Treasury announced on Friday.

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President Robert Mugabe and his Chinese counterpart Xi oversaw the signing of 10 government-to-government agreements on Tuesday night in Harare headlined by the infrastructure projects.

While details were not immediately available, the Ministry of Finance and Economic Development issued a statement run in the national press on Friday, announcing the value of the agreements.

The Export-Import Bank of China will provide a $998 million loan for the expansion of Hwange power station, which will add 600 megawatts to the plant, whose current installed capacity is 920MW, although reliable output is much lower at 600MW.

The loan is at a concessionary interest rate of two percent per year, over 20 years, the ministry said.

China Eximbank will also put up $99 million, also at two percent over 20 years, for state-owned telecommunications firm TelOne’s broadband access project.

Both loans will take effect in the first half of 2016, the ministry added.

China also extended a 400 million yuan ($63 million) grant for the construction of Zimbabwe’s new parliament building.

Upon Xi’s arrival on Tuesday, finance minister Patrick Chinamasa had told journalists that private sector-driven energy projects would also be negotiated during the state visit, the first by a Chinese leader since Jiang Zemin in May 1996.

Private-sector initiatives, the China Africa Sunlight Energy coal and methane gas projects, Makomo Resources’ thermal power plant and the coal-fired, French-backed Lusulu venture are all at various stages of drawing Chinese funding.

China Africa Sunlight Energy chief executive Charles Mugari, who signed one of two private sector agreements on Tuesday, has said his group expects a $700 million capital injection before the end of 2015 into the first phase of his firm’s ambitious $2,1 billion energy projects.

China Africa Sunlight Energy, initially a 50/50 joint venture between Zimbabwe’s Old Stone Investments and Shandong Taishan Sunlight of China, this week announced it had a new Chinese parter – Yunnan Linkun Investment Group, which replaced Shandond Taishan,

The group plans to spend $2,1 billion in the next five years on power generation, coal mining and methane bed gas extraction in Matabeleland north.

In July, Zimbabwe’s French-backed PER Lusulu Power signed an agreement with China State Construction Engineering Corp Ltd to build a $1,1 billion coal power station starting in April 2016, with the 600MW plant being the first phase of a 2,000 MW project.

Lusulu officials have said China State Construction Engineering Corp will design and construct the plant, as well as build power lines to transmit the electricity and expects to complete the project in 2019.

Makomo Resources, Zimbabwe’s largest coal producer by output, has also laid out plans to build a $1,5 billion, 600MW thermal power plant in Hwange, to be financed by Chinese investors. -The Source

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