$11,2m debt stalls Hwange expansion project
FINANCIAL closure for the $1,1 billion Hwange Thermal Power Station units 7 and 8 expansion project is hanging in the balance after the Government failed to clear $11.2 million arrears to China Export and Credit Insurance Corporation (Sinosure) for previous deals.
Sinosure is a state-funded policyoriented insurance company established for promoting China’s foreign trade and economic cooperation. It is a finance agency that guarantees and ensures financial outlays from that country.
While the project has theoretically taken off with the signing of loan agreements and lending agreements between the Government and Sinosure, the only hurdle standing in the way of the project is the $11,2 million, permanent secretary in the Ministry of Energy and Power Development, Mr Partson Mbiriri said.
“The addition of two new units (Hwange 7 and 8) at Hwange Thermal Power Station has been affected by challenges in terms of financial closure. Unfortunately, there are challenges, which to some extent are national challenges. In order to have financial closure, in order for financial institutions to endorse the project, we need to be up to date in terms of payments of our existing loans. Unfortunately, as a nation we have existing loans or arrears, which need to be attended to before we get financial closure for Hwange 7 and 8.
“So we will continue to engage but Zimbabwe needs to do what it is supposed to do so that we progress the project,” said Mr Mbiriri in an interview in Gweru last week.
“In this case we owe Sinosure, an agency that guarantees and ensures financial outlays from China $11,2 million and that figure is unrelated to energy.
“Come March next year that figure is likely to increase if we do not do something about it. But the secretary of finance has assured me that they are looking into the matter.”
Mr Mbiriri, however, said the necessary technical work for the project has been concluded. He added that a Zimbabwean delegation, which had been to China to work on the deal, had submitted their report.
“All loan agreements, lending agreements and some other work have been done and we