Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

***The views expressed in the articles published on this website DO NOT necessarily express the views of the Commercial Farmers' Union.***

Zim to clear US$260m Federation-era debt

Zim to clear US$260m Federation-era debt

Thursday, 20 October 2011 16:43

By Nqobile Bhebhe

GOVERNMENT has agreed to clear decades long debt with Zambia for the shared 
Kariba infrastructure, paving the way for both countries to co-operate in 
constructing the 1 650 megawatt (MW) Batoka hydropower station.

The power project, first mooted in 1993, wasmeant to be a joint venture 
between Zimbabwe and Zambia. Lack of funding and reluctance by the Zambian 
government to start the project delayed its implementation.

Economic Planning and Investment Promotion minister Tapiwa Mashakada said 
the debt issue was extensively discussed during cabinet sessions, adding an 
agreement was reached to finance the debt.

Mashakada said the project had  been stalled over the assets at Kariba.

Zambia, according to Mashakada, said they would not partner Zimbabwe until 
the asset debt accrued during the Federation-era was cleared.
The amount owed is estimated at US$260 million.

“The Zambians told us that for them to co-operate on the Batoka project, 
Zimbabwe should clear the federation-era debt. We discussed this matter in 
cabinet and agreed that we should pay them (Zambians) the principle amount 
only and not the interest, then we can start cooperation in building the 
Batoka,” said Mashakada.

However, he would not say when the decision was reached, the payment 
modalities and how the government is set to raise the money as the economy 
is currently facing liquidity constraints.

But he said the power project was “key to solving energy challenges”.

Batoka is situated 50kms downstream of Victoria Falls and would provide 800 
MW of hydro power generation capacity for each of the two countries.
Construction of the power station was expected to resolve the country’s 
power shortages which have disrupted the country’s frail  economy.

Zimbabwe’s industries and households have suffered incessant power cuts that 
have disrupted the normal functioning of the country’s economy which is on a 
recovery path after a decade-long economic crisis that ended with the 
adoption of multi-currencies in 2009.

The situation has triggered frequent protests from power users with several 
mining firms installing generators to keep production online.
Mashakada said his ministry, in conjunction with Energy and Power 
Development ministry, has approved four power thermal projects to ease 
electricity shortages.

A consortium made up of Utho Capital, KPMG and ATC was recently awarded a 
Zesa tender to oversee financing of two projects that would bring on board 
an additional 900 MW through the expansion of Kariba South and Hwange at a 
cost of more than US$1 billion.

A total 300 MW would be augmented to Kariba South to lift capacity to 1 050 
MW from the current 750 MW. The expected investment in this particular 
project is US$300 million.

The Hwange Power Station project would see an additional 600 MWgenerated 
after the installation of two new thermal units at a minimum cost of US$770 

The consortium would also go into transmission contracts with ZETDC.

In the Kariba South extension project, existing and extension assets are to 
be housed in a single entity, separate from Zimbabwe Power Corporation.
The projects should be complete by 2016.

In the long-term, Zesa was looking at the Gokwe North project at a cost of 
US$2,24 billion with a year 2017 timeline. Once complete, the project would 
add 1 400 MW to the grid.

At a recent mining conference, a Zesa board member Simba Mangwengwende said 
the cost of the hydropower station has doubled from US$2,5 billion when the 
project was conceived in 1993.


107MW solar plant for Hwange

107MW solar plant for Hwange   12/7/2019 The Chronicle Pride Mahlangu, Business Reporter INDEPENDENT power producer, Power Ventures (Private) Limited, has applied for a licence

Read More »

New Posts: