Golden Sibanda Senior Business Reporter
Zimbabwe Stock Exchange (ZSE) listed gold and diamond miner, RioZim may start construction of its 178 megawatt solar power plants early in the New Year with a Chinese bank having reportedly agreed to bankroll the project.
If the project is completed within a period of six months, as widely anticipated, it will help ameliorate the crippling power crisis buffeting the entire economy.
This comes after RioZim earlier this year signed a US$200 million agreement with Chinese firm, China Gezhouba Group International Engineering Corporation (CGGC) to build three solar plants with combined output of 178MW.
The agreement signed in May this year will result in phased construction of solar power stations, to be built in different locations, that will provide power to the group’s mining operations namely Renco, Cam and Motor and Dalny Mine.
Highly placed company sources told The Herald Finance and Business that the diversified miner had agreed terms with Industrial and Commercial Bank of China (ICBC) to fund 85 percent of the project.
Standard Bank China is reportedly also expected to provide part of the project finance amounting to 15 percent of the total project cost of US$200 million.
“The project is moving very well and is on course. In fact, term sheets have been agreed with ICBC to provide 85 percent of the funding. Standard Bank will also make 15 percent contribution to project finance,” the source said.
Chief executive Bheki Nkomo could not be reached for comment on Friday last week but is previously on record saying the project will be among the biggest on the continent and will not only feed RioZim, but also the national grid.
“In terms of the agreement, the parties have agreed to co-operate together to pursue, in phases, a 178 megawatts solar power project in Zimbabwe, which is an estimated investment of US$200 million,” Mr Nkomo said in May.
Construction is expected to commence in January next year and the engineering procurement and construction (EPC) contract partners have reportedly indicated that building the solar powered plant could last just 6 months. The solar power stations will be constructed in the various locations across the country where the diversified mineral resources group — which also extracts diamonds in Murowa, Zvishavane — conducts its mining operations.
The agreement and project comes at a time Zimbabwe is grappling with power shortage on the back of reduced generation at one of the major power stations, Kariba South hydro power station, which was affected by drought in it catchment area this past rainy season.
The drought caused reduced inflows into Lake Kariba, causing water levels to drop to precarious levels and prompting the Zambezi River Authority, which administers affairs of the dam, to cut water allocation for power generation at Kariba South, and North operated by Zambia, which shares the dam with Zimbabwe.