FINANCE minister Patrick Chinamasa says China is expected to invest nearly US$4 billion in the country’s energy sector as Zimbabwe looks east for capital intensive investment.
Lack of investment in the energy sector and a huge debt overhang has seen the country battling with perennial power shortages, making the country’s economic sectors uncompetitive. The country’s existing power stations are currently generating less than 1000MW against peak demand of 2200MW.
Chinamasa told journalists on the sidelines of a two day visit by Chinese President Xi Jinping that government will focus on upgrading its power plants and other key infrastructure to spur economic growth. The visit by the Chinese leader is the first since 1996, amid expectations this would improve bilateral relations.
He said Zimbabwe and China are next year expected to sign more energy deals as the Southern African nation gears for an economic takeoff.
“So, as far as we are concerned as Zimbabwe, the visit is very significant, it is deepening, broadening our economic co-operation. We are going to be signing Hwange 7 and 8 ($US1,3 billion expansion project), which when undertaken, will add 600MW into the national grid,” Chinamasa said.
“There are also three other power projects which are going to be funded by the Chinese and these are private sector-driven; they’re Makomo Resources, China Sunlight and Lusulu – each of them adding 600MW to the grid. In the first half of next year we should see two of these reach financial closure.”
Early this year, Zimbabwe’s French-backed PER Lusulu Power signed an agreement with China State Construction Engineering Corp Ltd to set up a US$1,1 billion coal-fired power station next year. The projects which will commence in April 2016, with the 600MW plant being the first phase of a 2000 MW project.
Zimbabwe’s largest coal producer by throughput, Makomo has also undertaken to build a US$1,5 billion, 600MW thermal power plant in Hwange.
China Africa Sunlight Energy, a joint venture between Zimbabwe’s Old Stone Investments and Shandong Taishan Sunlight of China, plans to spend US$2,1 billion in the next five years on power generation, coal mining and methane bed gas extraction in the southern parts of the country.-Staff Writer'