INDIAN giant Essar Africa investment into the defunct Zimbabwe Iron and Steel Company (Ziscosteel) has helped shore up the country’s greenfield investments from $0,8 billion in 2010 to $5,8 billion last year, latest figures have shown.
Report by Acting Business Editor
The United Nations Conference on Trade and Development (UNCTAD) World Investment 2012 Report showed that the deal accounted for up to 80% of the inflows towards greenfield projects last year.
“In Africa, Zimbabwe attracted the largest greenfield investment. The $4 billion investment from the Essar Group (India) contributed the bulk of the rise in Zimbabwe’s greenfield investments from $0,8 billion in 2010 to $5,8 billion in 2011, making this country the largest recipient among African landlocked developing countries,” UNCTAD said in the report.
A greenfield project is one that lacks any constraints imposed by prior work.
UNCTAD said although the amount thus far committed by Essar Africa Holdings was reportedly $750 million, Zimbabwe was counting on additional investments in related infrastructure to ensure sustainable operations at one of the joint ventures.
Essar is, however, yet to commence operations due to bickering over the control of minerals to be used as feedstock for the project and demands that the project should be in line with the country’s indigenisation policy.
Cabinet last month agreed to implement the original Essar deal without amendments.
In 2010 the government signed a $750 million deal allowing Essar to take over Ziscosteel in which the Indian firm assumed an 80% shareholding of NewZim Minerals.