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Harare - Zimbabwe signed a $355m agreement with the Export-Import Bank of China on Monday to expand power generation and help alleviate perennial electricity shortages.
"The bank will provide funding amounting to $319.5m whilst the government will finance the balance, amounting to $35.5m," said Finance Minister Patrick Chinamasa after inking the deal with the bank's vice-president Zhu Hongjie.
Chinamasa said the loans would be repaid at 2% interest per year, with "a grace period of five years and repayment period of 20 years".
The money will be used to increase the Kariba South Hydro-power station's capacity by 300 megawatts.
Zimbabwe generates 1 200 MW on average per day against a peak demand of 2 100 MW.
To conserve scarce electricity the country's power utility resorts to long hours of load-shedding, in some cases lasting up to 10 hours in major cities.
Zimbabwe has buttressed economic ties with China after falling out with the West.
The EU and the United States imposed sanctions including a travel embargo and an asset freeze on veteran President Robert Mugabe and his close allies after presidential elections in 2002, which Western observers condemned as flawed.
