Zimbabwe seals energy, telecoms deals with China

Zimbabwe and China signed a string of deals yesterday, headlined by a $1.4 billion agreement for the upgrade of Hwange thermal power plant and a fibre optic project for state-owned telecommunications firm TelOne, as Chinese president Xi Jinping began a two-day visit to the southern African country.

A total of 10 government-to-government deals were announced following more than two hours of closed-door meetings between Zimbabwe President Robert Mugabe and Xi, as well as their ministerial teams at State House in Harare.

Apart from the $1.4 billion Hwange and $98 million TelOne deals, an agreement for the construction of Zimbabwe’s new parliament building – at an unspecified cost but previously estimated at $145 million, was also struck. While it was not immediately clear how this would be funded, Mugabe, in remarks during a state banquet he hosted for Xi, seemed to suggest China had given Zimbabwe a grant for the new parliament building.

Under Xi and Mugabe’s watch, ministers and high-ranking officials from the two states also signed agreements ranging from economic and technical liaison, aviation co-operation, pharmaceuticals, donation of equipment for wildlife authorities, policy co-ordination for state-owned enterprises and taxation. Financial details of the deals were not immediately available.

The Hwange expansion project, to be funded by China’s export-import bank (China Eximbank) and carried out by SinoHydro, will add 600 megawatts to Zimbabwe’s power grid.

The expansion project, which was initially expected to commence during the second half of 2015, is now expected to start by the first quarter of 2016 and take approximately 42 months to complete.

China Eximbank is expected to put up almost $1.2 billion for the Hwange expansion project, with the Zimbabwe Power Company contributing about $200 million.

ZPC officials have said 80 percent of the Chinese loan would attract a concessionary interest rate of 2 percent, while the balance attracted commercial rates of around 5 percent.

Zimbabwe currently generates half of its 2 200MW peak electricity demand, with rolling power outages affecting mines and industries holding back economic growth.

SinoHydro is also currently working on the $500 million Kariba South expansion project, which is expected to bring an extra 300MW to the national grid by 2018.

Speaking during a colourful dinner on the grounds of State House, Mugabe thanked China for her “understanding, flexibility and empathy” which he said contrasted sharply with the “arrogance of those who seek hegemony.”

Mugabe said China’s growing economic co-operation with Zimbabwe had vindicated his ‘Look East’ policy, adopted in response to sanctions imposed by western governments over allegations of poll fraud and the oft-violent takeover of white-owned farms by landless blacks.

“Today the whole world is looking east, including those who in 2000 chided us for that policy,” Mugabe said.

In his 9-minute response, Xi extolled the “mutual understanding, amity and affinity” that China shares with Zimbabwe and called for deeper, mutually beneficial co-operation.”

“My visit is about friendship and co-operation. Earlier today, President Mugabe and I had deep and fruitful discussions. We agree that both countries should make full use of this, to translate our friendship into concrete impetus for mutual benefit,” Xi said.- The Source

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