Zimbabwe and the China Export and Import Bank on Monday signed a $355 million loan agreement for the expansion of the Kariba South Hydro Power Station. This will boost the station’s power generation capacity from 750 to more than 1,000 megawatts.
Finance Minister Patrick Chinamasa signed the agreement on behalf of the government while vice president Zhu Hongjie represented the China Export and Import Bank.
Under the agreement, the Chinese bank will provide $319.5 million, representing 90 percent of the total project costs while the remainder will be provided by the state-owned Zimbabwe Power Company.
Mr. Chinamasa said the loan repayment period is 20 years.
He said Zimbabwe will honor its international commitments including those from the Chinese bank, adding that this will assist in unlocking more resources from the bank.
Mr. Chinamasa said with the entire Southern African region experiencing power shortages, the loan is crucial as it will help in easing power outages which are affecting economic growth.
Zimbabwe is generating about 1,200 megawatts against daily requirements of 2,200 megawatts. The demand, Chinamasa said, would be higher if industry was operating at full capacity.
Mr. Hongjie praised the Chinese company doing the expansion, Sino Hydro, saying it has a good track record with the bank.
He expressed confidence the project would be completed soon so that it can bring benefits to the people.
Mr. Chinamasa said he expects the Ministry of Energy and Power Development to ensure the project is speedily implemented.
The Chinese bank is also financing the construction and expansion of the Victoria Falls International Airport to the tune of $150 million.
At the same time, it is financing the upgrading of the Harare water system and has provided a loan for the construction of the Zimbabwe Defense College, among many other projects in Zimbabwe.