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China to help build $3 billion coal plant in Zimbabwe

  • Sengwa power plant to be built in four phases of 700MW each
  • Project previously owned by Rio Tinto before handed to RioZim

Rio Energy Ltd., a unit of RioZim Ltd., will build a 2,100 megawatt thermal power plant with China Gezhouba Group Corp in northern Zimbabwe at a projected cost of $3 billion, Rio Energy said Monday.

“CGGC will develop the project and assist with the fund raising,” Caleb Dengu, chairman of Rio Energy Ltd said last week. The power plant at Sengwa will be constructed in four phases of about 700 megawatts each, bringing total capacity to 2,800 megawatts.

“We have coal reserves to support a 10,000 megawatt plant at Sengwa,” Dengu said.

A 250 kilometer (155-mile) pipeline will carry water from Lake Kariba to Sengwa. The pipeline, and a 420 kilovolt-ampere power line, will be built by PowerChina, said Dengu. The first phase of the project will cost about $1.2 billion, he added.

The Industrial and Commercial Bank of China has given a formal expression of interest in the project and is negotiating with Sinosure, also known as the China Export and Credit Insurance Corp, to cover country risk insurance costs, Dengu told Bloomberg.

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Zimbabwe generates and imports about 1,300 megawatts of electricity, short of its 2,200 megawatt demand. Daily power outages have hampered industrial capacity for almost two decades.

A two-year drought blighted the country’s Kariba thermal power plant by draining the reservoir, while aging equipment at its main Hwange thermal plant causes incessant breakdowns and outages that see many consumers receiving only eight hours of power a day.

RioZim was spun off from Rio Tinto Plc in 2004. London-based Rio initially retained a stake in diamond mines and Sengwa before selling those to RioZim in 2015.

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