Finance Minister Patrick Chinamasa who recently led a delegation of senior Government officials to China to look for funding revealed that Sinosure, the Chinese institution that insures China’s overseas investments is reluctant to provide funding for the Hwange Thermal Power Station expansion project because the Zimbabwean Government has accumulated arrears.
Speaking after touring Hwange Thermal Power Station recently, Chinamasa said completion of the power project would ease demand of foreign currency on the fiscus. He however said there was an issue surrounding the release of funding by Sinosure. Said Chinamasa:
The project is much bigger and will generate 600MW. Financial closure has been concluded. There is just one issue around Sinosure, which I hope to sort out; otherwise, it should be on course. As you know, the Chinese, through the China EximBank, only provide 85 percent of the project cost and we have negotiated with Sino Hydro and others to take equity in the project of 15 percent. That also has been concluded and finalised. They are saying we have accumulated arrears; they are not in a position to ensure Hwange 7 and 8, but these are negotiations, which I am hopeful will be sorted out. Once that is done, Hwange 7 and 8 will be off the ground. As far as I am concerned, the outstanding issue with Sinosure is an issue that we are going to overcome given the preliminary discussions that we have had.
There were reports China was tightening its purse strings as Harare is struggling to repay outstanding loans amounting to US$160 million ahead of President Emmerson Mnangagwa’s visit to the Asian country. The Zimbabwe Independent reported last week that the China Export and Import Bank is said to be reluctant to extend further concessional funding to Zimbabwe before the country clears its debt. Sinosure also wants arrears paid back before new finance could be guaranteed and extended to Zimbabwe. Both institutions have, however, committed to extending further loans to Zimbabwe once a solution to the problem has been found.