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AVM Africa Ltd group executive chairperson, Mr Kenneth Musanhi shakes hands with Baic Automative Group president, Mr Fengli Guo at State House on Tuesday after signing a Joint venture agreement .

Lloyd Gumbo Senior Reporter
Chinese financial institutions are expected to avail at least $3,5 billion to two private companies here following the signing of the cooperation and funding agreements during this week’s State visit by Chinese President Xi Jinping.

Yunnan Linkun Investment Group of China has acquired 50 percent shareholding in China Africa Sunlight Energy, which is expected to unlock funding for an integrated project worth over $2 billion.

This will see the firm constructing a 600-megawatt thermal power station in Gwayi, produce about 3 million tonnes of underground coal per year, construct the Gwayi-Shangani Dam as well as Gwayi-Insukamini Power Station transmission line.

On the other hand, BAIC Automotive Group of China, is acquiring a 51 percent stake in AVM Africa Limited, which will see the firm bringing in knocked down kits for buses, trucks and tractors for assembling in Zimbabwe. The two Chinese investing firms have courted Chinese financial institutions to avail funding for the two projects that are expected to create thousands of jobs early next year when they officially start.

China Africa Sunlight Energy chief executive officer, Retired Colonel Charles Mugari, said the integrated project would require about $2 billion.

“The signing of this EPC (Engineering, Procurement and Construction) contract is very critical in the sense that it is now going to open all the avenues for funding,” he said.

“The fact that our signing was blessed by the Chinese President Xi Jinping, makes it a very critical stage in the financial mobilisation stage because all financial institution in China will now know that the project is supported by the Chinese and Zimbabwean Governments.

“This integrated project will cost close to $2 billion in total and the bank that we are talking with has indicated that there is a possibility that we could get up to $700 million before the end of this year so that we can start working on the project.”

Rtd Col Mugari said officials from the Chinese bank were in Zimbabwe about a fortnight ago for feasibility studies where they satisfied themselves that everything was in order.

“The Government has told our financiers that it is willing to give them sovereign guarantee if it is required. But looking at the financials of the project, the project on its own is viable, but financiers always need extra security and the Government has already promised them that they will get the required sovereign guarantee as well as a lot of other incentives that go with investment of this nature,” said Rtd Col Mugari.

AVM Africa Ltd group executive chairperson, Mr Kenneth Musanhi, told The Herald yesterday that the Industrial and Commercial Bank of China had agreed to fund the project.

“We signed a joint venture agreement with BAIC of China, which will see them bring equipment, machinery and latest technology as well as buses, trucks and tractors in complete knock down kits then we will assemble them here. This will create employment for our people which is in line with ZIM-ASSET.

“We are looking at about $1, 5 billion for this project. The Industrial and Commercial Bank of China signed the funding framework through the Stanbic here during President Xi’s visit.”

Mr Musanhi said the money would be used for re-tooling, to buy latest automated technology, assembly kits and plant rehabilitation over a period of five years. He said the tractors and agriculture implements would go a long way in supporting agriculture as they would be sold at very competitive prices.

Government’s integrated telecommunications firm, TelOne said the $98 million loan facility that was signed by Finance and Economic Development Minister Patrick Chinamasa, would go a long way in capacitating it.

“This means that the network modernisation plan of the company will now become a reality,” said TelOne corporate communications manager, Mrs Melody Harry, in emailed responses.

“It also means that Zimbabwe is getting closer to the reality of connectivity for everyone everywhere, which is a key principle in our vision and also ZIM-ASSET.

“Under the TelOne Business Transformation Strategy (2014-18) there are a number of projects, which have been planned and were awaiting implementation. Accessing this facility will see the commencement of deployment of these projects, which include modernisation and expansion of the network, and value added services.”

Mrs Harry said once the projects were implemented, the company was expected to experience growth in its subscribers’ base and ultimately revenue. The Zimbabwe Power Company would also receive about $998 million from China Export and Import Bank towards the expansion of Hwange Thermal Power Station units 7 and 8.

ZPC also signed a cooperation agreement with the contractor Sinohydro that will see the Chinese firm getting a stake in the power station.

ZPC managing director, Engineer Noah Gwariro said: “The deal signed by Minister Chinamasa will allow ZPC to cover the bulk of costs for projects.

“The investment framework agreement allows ZPC and Sinohydro to do a joint venture for the balance or counterpart funding.