$11,2m debt stalls Hwange ex­pan­sion project

Chronicle (Zimbabwe) - - Business Chronicle - Pa­trick Chi­tumba

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

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