eBusiness Weekly
Golden Sibanda
New York Stock Exchange (NYSE) listed conglomerate, General Electric, is among five foreign investors that diversified Zimbabwe Stock Exchange (ZSE) listed miner RioZim has short-listed to develop its $1,5 billion Sengwa thermal power project, Business Weekly can reveal.
GE and four other suitors, among them an unnamed Chinese company, have reportedly since been furnished with a bankable feasibility study, which they are evaluating within a 90-day period and thereafter submit proposals on the project.
GE is incorporated in New York and headquartered in Boston, Massachusetts. As of 2018, the company operated through a number of segments that included aviation, healthcare, power, renewable energy, digital, additive manufacturing, venture capital and finance, lighting, transport, and oil and gas.
In 2017, GE ranked among the Fortune 500 as the 13th-largest firm in the US by gross revenue. In 2011, it ranked as the 14th-most profitable and in 2012, the company was listed as the fourth-largest in the world among the Forbes Global 2000.
A source privy to the developments told Business Weekly that RioZim had, at least for now, taken the decision that it would not sign any exclusive agreement with any of the prospective investors until all had completed and submitted proposals.
The prospective foreign investors will, soon after all have completed evaluating the bankable feasibility study, then respectively send engineers to visit Zimbabwe to assess the Sengwa project on the ground vis-a-vis contents of the feasibility.
“We have short-listed five, including General Electric, and a Chinese company. We have given them our bankable feasibility study before they sign confirmatory agreements and they are currently studying the feasibility study, but the Chinese firm has already finished the evaluation,” the source said.
This publication is reliably informed that RioZim is targeting to sign an exclusive agreement with one of the five prospective investors by June this year and soon after begin processes to build what will be the biggest thermal power plant in Zimbabwe.
Hwange Power Station is currently Zimbabwe’s biggest thermal plant, with current reliable production capacity of 550 megawatts.
Although the plant had installed capacity of 900MW, the plant cannot generate to its full potential due to advanced age. Even after planned extension by 600MW, by another Chinese firm Sinohydro, Hwange will still be smaller than Sengwa, which RioZim intends to build near its coal resource in Gokwe North.
The Sengwa coal power plant project has been on the cards since 1994.
Chief executive Bheki Nkomo is on record saying RioZim was looking for investors with a track record in projects such as Sengwa.
However, Nkomo could not be reached for official comment this week, as he would not pick calls to his mobile phone.
The company intends to build a power station based on a coal resource of 1,3 billion tonnes, capable of generating up to 2 800MW, nearly equal Zimbabwe’s total installed capacity.
The proposed power project envisages the construction of a number of smaller power plants over a period of ten years. In order to achieve this goal, RioZim is in the process trying to bring in technical partners to help in constructing the power station.
RioZim was last year forced to refloat its tender aimed at raising funding from global investors to finance the planned 1 200 megawatt Sengwa thermal power project in Gokwe North, after initial efforts to find suitors in China failed to yield results.
It once secured an interested Chinese funder, a State owned company, but the deal fell through as it could not be approved by Beijing because the firm needed to be restructured since it also had no experience of investing overseas.
The group is seeking roughly $1,5 billion for the composite project, whose constituent parts will entail the development of a coal mine, thermal power station, water pipeline to the power station and a power transmission line to the national grid.
RioZim, which has mining interests in gold, diamond and nickel processing also needs funding to build a residential location where workers at the power plant and coal mine will reside.
RioZim said mid-last year that it had received many expressions of interest, most of which never materialised and at the time only Nigerian billionaire Aliko Dangote and a Chinese firm had at the time shown “more aggression” for the project.
The project is part of several independent power projects licensed by Government, as part of efforts to resolve the country’s power deficit. Due to limited installed power generation capacity, Zimbabwe can only produce 1 200MW yet demand at peak periods stands at an average 1 600MW.
Interest in the Sengwa project, which has been outstanding since the early 1990s has increased amid growing power shortage in Southern Africa, which has an installed capacity of 52 598MW against a demand of 49 563Mw. Output, however, stands at 46 910MW giving the region a shortfall of 8 247MW.
