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Minister Chinamasa

George Chisoko in New Delhi, India
Zimbabwe and the Export-Import Bank of India (Eximbank) will today sign an $87 million loan agreement to rehabilitate and upgrade Bulawayo Thermal Power Station.

Today’s formalisation of the agreement comes at a time Zimbabwe, which depends on hydro for electricity generation, is experiencing massive power outages because of the falling water levels in Kariba Dam and problems at Hwange Thermal Power Station.

The water level has fallen because of the drought that affected parts of central and southern Africa in the last rainfall season. Climate change has been blamed for the drought and other adverse weather conditions and it seems its effects are far from relenting, making the case for switching to alternative energy sources, such as thermal power a matter of necessity and not choice.

Finance and Economic Development Minister Patrick Chinamasa is expected to sign the agreement on behalf of the Government.

Eximbank extended the loan to Zimbabwe as part of its Africa Focus programme under which the bank provides concessionary loans to Governments for infrastructure, agriculture and energy development, among other areas. The programme is designed to enhance bilateral cooperation and investment in Africa.

The loan carries a two percent interest and will be repaid over a period of 10 years with the Government being given a grace period of five years before it starts repaying the loan. In an interview after meeting African journalists yesterday, Eximbank deputy managing director, Mr David Rasquinha was upbeat about the signing of the agreement saying the loan would immensely help Zimbabwe to tackle its electricity problems.

“All is set for the signing of the agreement with Minister Chinamasa tomorrow (today) and we are excited we are playing a part in addressing Zimbabwe’s energy requirements.

“The rehabilitation will obviously boost Bulawayo Thermal Power Station’s energy capacity generation and also improve energy efficiency, which would in turn be fed onto the national grid and in the process help households who have become accustomed to using generators for energy,” said Mr Rasquinha.

Eximbank has been involved with Hwange Colliery where it injected $13 million towards the purchase of equipment. It has also injected $28,6 million in Decker Pumping Station to supply Hwange with power.