Zim seeks foreign investors

Acting secretary in the energy and power development ministry Munyaradzi Munodawafa told a parliamentary committee yesterday that "scores of investors" were willing to invest in the troubled country's energy sector and talks with different parties were underway.

Munodawafa told parliamentarians that local and foreign investors have expressed interest in the Manyuchi mini hydro power station, extracting gas at coal-bed methane in Lupane, in Northern Bulawayo, and extracting uranium in the Zambezi Valley where uranium deposits were discovered.

"A total of €28m is needed for the construction of the Manyuchi Power Station but we only got Z$300m from the fiscus for the project. We have got an investor who is looking at getting the project off the ground," Munodawafa said.

He said designs for the hydron power station at Manyuchi had been done while an agreement was reached between the Government and Russian investors who have shown interest in the project.

"What is only left is for the Reserve Bank of Zimbabwe to finalise issues with the Russians," he said.

'In its infancy'

Legislators heard that Manyuchi Power Station would on completion generate 5.5 megawatts while a local company had partnered a foreign investor to tap a long shelved coal-bed methane in Matabeleland North.

"We also have an investor we are discussing with on coal-bed methane. It is a Zimbabwean company with international partners able to give technical backup. The partners comprise of Indians and various others. A memorandum of understanding between Zesa and the company is being drafted," he added.

He added that investigations showed that $15m was needed to tap coal-bed methane.

"The nuclear energy issue is still in its infancy but we have got a company in Bulawayo that has given us its proposal," he said.

The official was grilled why his ministry was concerned with small power project and not focussing on bigger project which would help Zimbabwe's dwindling supplies, Munodawafa said establishing huge power stations required large amounts of foreign currency.

Zimbabwe is facing a severe foreign currency shortage made worse by the withdrawal of balance of payments support by the International Monetary Fund (IMF). The troubled country is also facing an acute energy crisis which has seen massive power cuts daily for both companies and homes.

Uphill task

Although Zimbabwe has the capacity to produce its own energy, a crippling foreign currency shortage coupled with a worsening economic crisis and a poisoned investment climate, has not helped the country in attracting foreign direct investment.

Zimbabwe is sitting on a thermal power station project in Gokwe, south of the country, because foreign investors are not willing to invest $1.4bn for the construction and development of the lucrative power station while another $2.5bn power project at Batoka has failed to entice investors.

Hwange Power Station, one of the country's larger power stations, is need of care and maintaince. Officials say "it chews a lot of foreign currency" and operates at near 10% capacity.

The station has capacity to generate over 900MW but generates less than 100MW forcing the country to rely on power imports from South Africa, Zambia, Mozambique and the DRC.

Critics say attracting investors is going to be an uphill task given that President Robert Mugabe's government is actively pursuing an indeginisation bill aimed at giving 51% shareholdings in companies to blacks.

The country is in its eigth year of economic recession characterised by high inflation now close to 7 000%, the world's highest.