*MEMORY MATARANYIKA *
Harare – ZIMBABWE and China on Monday signed a $319 million deal to help fund Zimbabwe’s bid to plug its growing power deficit which has resulted in power outtages that have crippled local industry and mining productivity.
Power supply is cited as one of the biggest impediments to economic growth in Zimbabwe owing to lost production time. However, other companies have had to resort to high voltage diesel generators while mining companies are paying a special power tariff to have guaranteed supplies.
The $319 loan agreement signed by Zimbabwe and China’s Export-Import Bank is expected to help Zimbabwe raise its power production capacity and stabilise electricity supplies. Zimbabwe produces about 1300 megawatts of electricity against peak demand of about 2 100 megawatts.
Finance Minister Patrick Chinamasa said on Monday that the Chinese loan will be used to fund an expansion project at the Kariba hydro power plant, which is currently producing 750 megawatts. The government intends to ramp up power production at Kariba to 1050 megawatts through a massive expansion project that the Chinese loan will bankroll.
The $319 million loan facility will be used to fund around 90% of the expansion project while Zimbabwe will foot the remaining 10%, Chinamasa said.
“This should go a long way in reducing power outages that characterise our power generation. For us the energy deficit has hamstrung the growth of our economy,” Chinamasa told journalists in Harare on Monday.
Zimbabwe will pay interest of 2% for the loan which has a repayment period of 20 years. The project to expand the Kariba power plant will take nearly four years, Chinamasa said.
The Zimbabwe Power Company (ZPC) said last month that it will be carrying out scheduled maintenance at two of Zimbabwe’s power stations; Kariba and Hwange, adding that this had necessitated the escalation in power cuts.
Charles Msipa, president of CZI, the industry representative grouping in Zimbabwe, has said that the increased power outtages would force companies to incur additional costs. He called on the state owned power company to spare industry and manufacturing firms the power outtages as a way of stimulating economic growth.