THE Industrial and Commercial Bank of China (ICBC) has not reneged on an agreement to finance the US$3 billion coal fired power plant Zimbabwean firm, RioZim, wants to develop in Sengwa, Gokwe fuelling speculation in the international media and business community that the deal have collapsed.
Industrial commentators said if it collapsed, this would be the umpteenth time that potential funding deals for the Sengwa thermal power project, which was mooted in the 1990s, would have gone off rails for RioZim, a Zimbabwe Stock Exchange (ZSE) listed diversified mining entity.
Company executives with intimate knowledge of the deal said while an environmental lobby claimed, through international media, that the deal was dead in the water, the claim was in fact incorrect, as no such official communication had been received from ICBC.
The report claimed ICBC told Go Clean ICBC, which includes environmental activist group 350.org, that it would no longer fund the 2 800 MW Sengwa coal project RioZim wants to develop in Northern Zimbabwe.
The project is based on a coal resource of 1, 3 billion tonnes, capable of generating up to 2 000MW of power, almost as much as Zimbabwe’s total installed capacity. The proposed project envisages the construction of a number of smaller power plants over the next ten years.
ICBC had reportedly signed a formal notice of interest in funding the plant, which would be constructed by China Gezhouba Group, while associated transmission lines would be built by Power Construction Corp of China
The bank also allegedly claimed that they would no longer proceed to fund the Lamu coal project in Kenya as well as the Sengwa coal project in Zimbabwe.
Company officials who spoke on condition of anonymity this week said the agreement between RioZim and the bank still subsisted and no official communication had been received from ICBC over the issue.
As such, RioZim executives are scheduled to meet with the Finance and Economic Development Minister Mthuli Ncube and other key Government stakeholders to discuss how the issue of the sovereign debt can be resolved to unlock funding.
Zimbabwe faces a crippling power deficit that at times see the southern African country resorting to regular load shedding in order to balance supply and demand. At peak periods, the country needs 1 800 megawatts against supply capacity of roughly 1600MW.
The Government is working on a number of projects to bridge the gap, including the 600MW expansion of Hwange PowerStation, its second largest plant after Kariba South, as well as a 2 400MW joint venture with Zambia to be built on the riparian Zambezi River.