HomeBusiness DigestGovt to cede equity stakes to Chinese

Govt to cede equity stakes to Chinese

Dumisani Ndlela

THE government is planning a massive divesture programme aimed at giving equity in state-owned companies to Chinese investors as it battles to raise US$2

,5 billion under its National Economic Development Priority Programme (NEDPP), businessdigest established this week.

The move could see the government hive-off key stakes in parastatals like Tel*One, Net*One, National Railways of Zimbabwe (NRZ) and Zesa’s subsidiary companies like the Zimbabwe Power Company as well as participation in private companies like Hwange Colliery in which the government has controlling stakes.

Sources indicated that the government, which last year suffered a major embarrassment after Beijing snubbed its request for a $1 billion loan, had experienced problems getting greenfield projects with Chinese participation off the ground because it could not provide requested guarantees.

For example, the US$600 million Hwange Power Station expansion project has been stalled by failure by the government and the central bank to provide guarantees on loan from Chinese firm Catic, and a down payment of US$90 million for the project, the sources said.

Now it is hoping that the Chinese, who have poured billions into Kenya and Nigeria, are likely to be appeased by stakes in parastatals and unlock huge lines of credit to spur a turn-around of Zimbabwe’s faltering economy.

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