More mega deals struck in China

Minister Chinamasa

Minister Chinamasa

Lloyd Gumbo in BEIJING, China
Zimbabwe struck more mega deals in China with funding agreements and feasibility studies of power projects, road dualisation and railway line construction being put on paper yesterday.
There were indications that the Chinese government had assured the Zimbabwean delegation — led by President Mugabe — that there would be no cap on how much Beijing can avail to Harare on viable projects from which loan repayments would be recouped from the same.

The President, who is here on a week-long state visit, witnessed the signing of the agreements that include a memorandum of understanding for feasibility studies on the digitalisation of the national broadcaster ZBC and Transmedia ahead of the June 2015 International Telecommunications Union deadline after which all broadcasters should have switched to digital.

A consortium of private Zimbabwean and Chinese companies, China Africa Sunlight Energy (CASECO), signed an integrated project worth over US$2 billion that will see the firm constructing a 600-megawatt thermal power station in Gwayi by 2017, produce 2,4 million tonnes of underground coal per year, construct the Gwayi-Shangani Dam as well as construction of Gwayi-Insukamini Power Station transmission line.

The company is a joint venture between Oldstone Investments, a Zimbabwean company and a Chinese firm, Shandong Taishan Sunlight Investments, with its consortium HCIG Energy Company Limited and Cad Fund.

The four firms signed the agreement for the development of the Gwayi Integrated Project.
Permanent Secretary in the Ministry of Defence, Mr Martin Rushwaya, who is chairperson of Oldstone Investments, signed on behalf of the Zimbabwean firm while three representatives of the Chinese companies represented their firms.

Speaking to the media after the signing ceremony, Finance and Economic Development Minister Patrick Chinamasa, said the project was one of the priority areas that the Zimbabwean delegation put to their Chinese counterparts in the Zimbabwe-China Joint Permanent Commission when they met last week.

He said besides the four key mandates of the joint-venture firm, the consortium had also committed to build a Gwayi Industrial Park in Gwayi under the Greater Lupane Special Economic Zone.

“The company is committing itself to establishing an industrial park, which would be a petro-chemical industrial park and this we hope over time will be able to set up fertiliser companies, which arise from exploitation of coal bed methane gas,” he said.

“When they establish their thermal power station, they will need water and they have committed themselves to lending $54 million to Government towards the construction of the Gwayi-Shangani dam and for the record, Government is looking for $10 million towards the construction so that work already done is not washed away when the rains come.”

Minister Chinamasa said the firm was immediately advancing Government a $10 million loan facility towards completion of work started before the rainy season starts.

“The first phase to generate 300MW will cost $400million and all told, we are looking at over the years an investment of around $2 billion into that area.
“In our joint commission, we also urged the Chinese authorities and state banks to give support to that private sector driven integrated project,” he said.

CASECO executive board secretary, Mr Isaac Chihuri, said signing of the agreement kick-started serious work on the project.
“The agreement signifies the coming into life of an integrated project and commencement of the implementation of the exercise. The historic significance is that the power station will be the third largest in Zimbabwe after Kariba Hydro and Hwange Thermal power stations.

“In terms of coal mining, the company will be the second largest after Hwange Colliery. CASECO will also become the largest independent power producer in Zimbabwe, which is clear that the company’ s efforts seek to complement Zim-Asset. People are already on the ground and civil works will start now that the deal has been signed,” said Mr Chihuri.

Minister Chinamasa said Government had also signed an agreement for feasibility studies on coal exploitation and construction of a thermal power station that was expected to add 600MW to the national grid.

“This will be in the Sibugwe area in Binga. So we have signed an MoU to jointly conduct a feasibility study. I want to emphasise that the feasibility studies that we are going to conduct will be done jointly. I consider it important that we build our own capacities to do these things,” he said.

Minister Chinamasa said Government also signed other MoUs for feasibility studies on dualisation of the country’s highways among them Beitbridge-Harare, Harare-Nyamapanda, Harare-Chirundu and Mutare-Harare.

He said Government would not mortgage it’s minerals to get funding from China for its projects.
“Our securitisation, which we have already agreed (on) is not to mortgage our minerals but to set aside a portion of cashflows that arise when we are exploiting our mineral resources whether diamond and gold.

“As you know, companies which are exploiting our diamonds, gold are liable to taxation royalty, depletion fee and other aspects of taxation and basically the framework which we have agreed is that from those taxes, I can set aside a portion of those cashflows towards servicing any loans that I secure to fund our various projects,” he said.

On digitalisation feasibility studies, Minister Chinamasa said Government was committed to meet the International Telecommunications Union deadline of switching over from analogue to digital by June next year.

Minister Chinamasa signed the MoU for feasibility studies on behalf of the Government while Huawei managing director Mr Spawn signed for his firm.
The firm has been given two months to complete feasibility studies.

“So time is not on our side and we have to move with some speed. So we have entered into an MoU with Huawei jointly to do a feasibility study on digitalisation and we hope that this could be done sooner rather than later.

“It’s only after we have done feasibility studies that we will be able to look up for money. Otherwise people look at you and say how much does it cost and we have no answer. So it’s very critical that we have a feasibility study done.

“Digitalisation will open up new opportunities, which in the medium to long term, I also look at this project as cash cows along with what we are doing with NetOne and TelOne. I look at these three as cash cows in terms of the expectations that I have for inflows into the exchequer,” he said.

Government also signed a loan of $218 million towards NetOne to expand their coverage of telecommunication that would result in the expansion of the mobile network operator’s network coverage.

Minister Chinamasa said he also requested China Export and Credit Insurance Corporation to give insurance to a loan of $98 million from China Exim Bank to TelOne in order for them to expand fibre optic programmes.

“In this regard, I have committed Treasury to take over a legacy debt of $359 million so that the TelOne balance sheet is cleaned up to make it more attractive to the suitors who might want to advance funding to the company. I have already communicated this message to China Export and Credit Insurance Corporation and also to China Exim Bank that when they deal with TelOne they should do without the $360 million legacy debt,” he said.

He said Government also signed MoUs for feasibility studies on construction of a railway line from Harare to Mutare, Alaska to Sherwood transmission lines and establishment of a cement factory in Mberengwa.

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  • Mayor of Mvurwi

    Gore muchabvuma mega kuti ZANU chiwororo!!

  • Dombodema

    One African President goes to China and seals meda-deals.
    50 African Presidents ndandanda kuUSA, only to come back with piles and piles of mega-pledges.
    MaCdes, they do not call us Great Zimbabwe for no reason.
    We are sitting on Africa’s centre of wealth gravity. They do not call us Great Zimbabwe for no reason.

  • Progressive Zimbabwean

    This is what we want to hear. Let us go beyond MoUs, feasibility studies to implementation. I am happy to hear that in a few days time the Kariba USD355 million is taking off and it is going to add 300 mw to the grid. If the above “mega deals” come on board we will have a further 600 mw. Add to that we shall have more small plants around the country from such as the 10 mw we are getting from Chisumbanje. Road infrastructure needs improvement as well. Like him hate him I have trust in the ability of the current minister of transport to get things happening and I am sure he is going to move strides from where Cde. Goche left. I am also optimistic with what is going on in the finance ministry. I know we have our concerns here and there with Cde Chinamasa but I think we have to be patient with him and give the chance to work for his country. Let us as Zimbabweans try and be constructive in our criticism of these guys and try and look at the positive side of things. Right now the politics is costing us dearly. We are expending our energies jostling for positions and the time we are loosing is not recoverable neither are we going to recover the energy. It is very unfortunate that when we should be creating jobs we are busy running around looking for fault in our brother next door instead of harnessing our collective effort for the collective good of all Zimbabweans. I am not condoning corruption, laxity and lack of accountability but I am saying we are loosing direction and focus as we fight our factional wars.

    • rob

      @progressive zimbabwean….thank you for that comment! i think you have hit the nail on the head. the fact that we so easily and automatically oppose any initiative that comes out of a person or institution that we consider to be politically opposed to us, is one of the reasons we will find it difficult to make good progress on many issues…..just because it is our president that has gone to china to secure financial partenships, the MDC will automatically doom it to failure…..if it was Tsvangirai that had done the exact same thing (whether China or any Western country), we would have had these very same people describing what a good job he has done….how rediculous is that…..and how rediculously racist is it for us to denigrate these efforts just because it is Chinese being spoken about……as Progressive Zimbabwean has said, the point is not to stiffle criticism, but to nurture CONSTRUCTIVE criticism. this means being supportive and encouraging where credit is due and providing solutions for where one recognises potential challenges or problems…….what we have here whereby we have people coming out to shout “lies” or “this is sure to fail” are actually just proving to be a hindrance to progress…..if we as a nation are going to succeed, we must work as a team…..working as a team requires genuine support of one another…anything short of that is a hindrance, and if you are going to be a whining hindrance, the rest of us that are trying to make things work would rather the rest of you just keep quiet……your NOISE is distracting

      • Tarubva

        Did you hear what rabid Zanu PF supporters said about Tsvangirai when he went to the UK recently? Not only Zanu PF supporters, but also this newspaper which we believe should be neutral considering it is state-owned? Did you hear what they said?

  • Mfundisi

    Wholesale liars and lies

    • Chokwadi

      Zimbabwe shall never be a colony again!

      • VaMayaya

        KKKKKK, rather it’s: This COLONY will never be a COUNTRY again!!!

  • Warrior

    Chinamasa said ” when they establish their thermal power station”. Really? its their thermal power station?

  • Observer

    2. Matabeleland Zambezi water – even Cecil John Rhodes was advised by the likes of Jameson that siting a city where Bulawayo was put would be unwise due to scarce water but Rhodes insisted.

  • GeorgeBachinche

    You the author, what can you do. Can you or your relatives build roads or railways or utilities. Has the government denied you a chance to build roads rally’s etc. government money comes from the people taxes and borrowing. If the government can’t borrow and if theropod cdont have money. Surely it is logical I
    That it seeks help from others who are willing

  • easy bunny

    This is a repetition of MoUs that were agreed years ago including the 144 million City of Harare water upgrade the is NOTHING new here.Same old same old.WAKE UP ZIMBABWE LET’S RISE UP.

    • Makusakatara


      Rise uuup?? What for? We are happy with what our President and his government are doing, so rising up is not on the table; it is not an option. Instead, what is on the table is the message that; “Let’s all rally behind our wise, consistent, focused, virtuous and great leader!!”

  • Peter Jongwe

    Privatise and list NetOne. Econet is doing it alone. Why is China being involved

  • Makusakatara


    South African whaaaaat? Companies from that country are by-and-large owned by Boers and so we remain skeptical when engaging them. ZUMA does not and has not created a single company that could come and do business with our companies here in this country.

    Chinese are better than South African in terms of their commitment to accomplishing the job. Who does not know that most of the companies from South Africa were once operating in this country but ran away because of their racist inclination?

  • Makusakatara


    Thank you for the brilliantly simplified explanation which is easily understood by even us, the economic illiterates.

  • Makusakatara


    That will attract Boers to want to bomb us. Why not start from below up so that when we are powerful enough and cannot easily be pushed around like Iran, we can then consider building a “nuclear” whatever.

    • dopiro

      Unopenga iwe. U remind me of mdara wangu who bought a black and white tv back then when he could afford a color tv because he was scared of witchcraft

      • Makusakatara


        Ko ndanga ndato penga kare? Hauoni sokuti iwe pauri kuti ndinopenga ndiwe unenge uchitopenga? Iko kuto tuka baba vako uchiti “he was scared of witchcraft” zvinoratidza kuti uri kupenga!!

  • jimmy

    wel said indeed its a mulitiplier effect eject 1 billion and wat do u get in return

  • jimmy


  • gloria Madhekwe

    start eating your computer now

  • samaz

    All i can say is Zhanga zhiri zhenyu zhazhedu

  • ian

    Lets learn to separate issues coz some of the African countries that attended the summit have already entered into huge deals with China. Its a dog eat dog world!