Ishemunyoro Chingwere and Africa Moyo
The re-engagement thrust adopted by President Mnangagwa’s administration since November last year has unlocked opportunities for local companies to attract credit lines and/or investors for several key projects that are capital intensive, particularly in the energy sector.
This comes as RioZim Limited, a major local gold and diamond miner, says it is now swarmed with letters of intent from potential investment partners wanting to plough funds into the firm’s thermal power project in Sengwa, Gokwe.
RioZim chief executive officer, Mr Bheki Nkomo told delegates at the company’s annual general meeting last week that since late last year, they have been receiving a flurry of enquiries for the power project.
“Since November 2017, we have seen policies coming through, including the improved indigenisation framework, tax incentives offered for energy projects and also the ease of doing business. The country has been opened up for business.
“(Because of this), we have seen an increase in letters of intent from potential investors interested in building a 700MW power station at Sengwa Colliery.”
RioZim’s Sengwa Power Project has been in limbo since 2010 as financiers were not keen to pump money into local projects citing high political risk.
Market watchers say since the resignation of former President Mr Robert Mugabe, about 50 percent of the political risk has gone, hence the rising investor appetite.
Sengwa Colliery is situated almost 13km from Chitekete Growth Point and the mine sits on 1,3 million tonnes of coal.
Feasibility studies done in 1997 have shown that about 538 million tonnes of the coal are proven reserves expected to feed the thermal power station.
The coal is classified as low rank or non-coking coal with an average calorific value of 16,7MJ/kg and 29 percent ash content, making it unsuitable for general commercial use.
The mega thermal power project is expected to gobble about US$3 billion over a five-year period until completion.
The new dispensation has created a fertile ground for foreigners to participate in local economic development without fear of losing their investments.
Architecture of Sengwa project
Mr Nkomo said phase one of the electricity project includes setting up two 350MW generators, evacuation power lines, a water pipeline, housing and community infrastructure and coal mine setup, among other things.
Feasibility studies done in 1997 suggested that a water pipeline from the Zambezi River should be put in place.
Said Mr Nkomo: “As I have said, we have received quite a number of proposals for the first time and we are very confident that we should be able to secure an investor in the near future.”
RioZim, through its energy subsidiary, RioEnergy, is focused on generating energy through coal, water and other clean energy sources, mainly solar.
Sources say about five top global energy players are angling to partner RioZim in the Sengwa Power Project.
RioZim is believed to be in discussions with various regional off-takers that are part of the Southern African Power Pool (SAPP) with a view to tying power purchase agreements (PPAs).
Several other investors have expressed interest in committing their funds into the country, with over US$20 billion worth of firm investment commitments having been received since December last year.
Preparations to start work at Karo Resources’ US$4,2 billion platinum project in Mashonaland West are shaping up with serious work expected in the near future.
Zimbabwe re-engages the world
President Mnangagwa declared during his inaugural speech on November 24 last year that Zimbabwe is now open for business.
He further implored previously hostile countries to consider burying the hatchet and re-engaging Harare.
Already, the European Union and the United States have indicated their willingness to work with Zimbabwe.
At the same time, engagements aimed at ensuring that the country re-joins the Commonwealth – which provides businesspeople, athletes and political leaders an opportunity to exchange notes with other member states – are underway.
To underline President Mnangagwa’s intention to re-engage the rest of the world, his party’s manifesto for the July 30 elections, captures the same under the theme “Unite, fight corruption, develop, re-engage and create jobs”.
The revolutionary party believes no country will achieve sustainable development for as long as it remains in isolation.