Zimbabwe has secured an $87 million credit line from the Export-Import Bank of India for the renovation and upgrading of the Bulawayo Thermal Power Station that will contribute an additional 70 megawatts (MW) to the national grid.
BY BUSINESS REPORTER
Currently, the power station is generating 30MW.
The signing ceremony for the credit line was made on Tuesday by Finance minister Patrick Chinamasa, representing Zimbabwe, and Export-Import Bank of India chairman and managing director Yaduvendra Mathur.
The credit line has a tenure of 13 years, made up of a 10-year repayment period and three years as grace period.
It has an interest rate of 2% per annum. The loan comes with a commitment fee of 0,5% and a management fee of 0,5%.
Chinamasa said implementation of the project would improve the supply of electricity, thereby boosting economic performance as it reduces the cost of production and reliability of power.
“What our economy requires is uninterrupted power supply to improve efficiency of industrial activities,” he said.
The project is earmarked to be completed in three years.
“The rehabilitation of Bulawayo Power Station will contribute an additional 70MW to our national grid from the current 30MW. The project will consequently help in reducing the current power deficit, which currently stands at 1 500MW in circumstances of depressed demand,” Chinamasa said.
The country is currently facing severe power outages, which is a huge blow to the already ailing manufacturing sector.
Chinamasa said government “is continuing to engage Export-Import Bank for more concessional facilities so as to help resuscitate our economy”.
“. . . we are looking for resources to be channelled towards economically viable projects that have a capacity to generate income and repay on their own so as not to put too much pressure on government,” Chinamasa said.
Export-Import Bank of India has in the past given Zimbabwe three credit line facilities worth $91,53m for the Hwange Power Station cooling system, purchase of motor vehicles, mining equipment and spares for Hwange Colliery Company Limited.