The government has signed a US$1.3 billion joint venture agreement with British-based Coven Energy to develop a fuel pipeline from the Mozambican port city of Beira to the capital city Harare, a cabinet minister said on Wednesday.
Coven Energy Limited will partner with the National Oil Company of Zimbabwe (NOIC) to develop and operate the pipeline in a 50:50 public-private partnership.
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Addressing the press after a cabinet meeting in Harare yesterday evening, Information Minister Monica Mutsvangwa said the pipeline would complement the existing one that also links Harare and Beira and make landlocked Zimbabwe a fuel hub for the southern Africa region. She said:
The project will result in the National Oil Infrastructure Company of Zimbabwe (Pvt) Ltd and Coven Energy Ltd entering into a 50:50 public-private partnership.
The project will create employment opportunities and generate foreign currency for the country. It will also help reduce vehicular congestion and the smuggling of petroleum products.
The pipeline will be built over four years, at an estimated cost of US$1,3 billion. The partnership will be for a period of 30 years.
Cabinet resolved that the parties sign a memorandum of understanding for purposes of conducting a bankable feasibility study which they will fund.
Zimbabwe has struggled with acute shortages of fuel due to perennial shortages of foreign exchange but supplies have improved in recent months after the government allowed companies to sell the commodity in U.S. dollars