In Zimbabwe, less than half the population has access to electricity. The country has been betting on coal-fired power to address chronic electricity shortages and create jobs.
RioZim has talked about building the Sengwa plant for more than a decade. Plans include adding 2.8 gigawatts (GW) to the grid and restarting the adjacent coal mine, which has been closed since 2014. Currently, Zimbabwe has the capacity to generate around 2.3GW, which comes mostly from a large hydroelectric power plant but also four coal-fired power stations.
The planned Sengwa plant, near the town of Gokwe, would create 1,100 permanent jobs and nearly four times as many temporary construction jobs, according to Rio Energy. Sedeya Jetro, head of a local primary school, said the jobs would enable parents to pay school fees and “mean a lot to this community.”
Rio Energy told Reuters that ICBC had in 2019 provided an expression of interest — or non-binding commitment — to a Chinese construction company to fund the first phase of the Sengwa project. Neither the construction company, PowerChina International Engineering Co., nor its parent, Power Construction Corporation of China, responded to requests for comment.
Minsheng Bank also provided a non-binding commitment to RioZim to fund a second phase of the Sengwa project, according to Rio Energy and an August 2020 letter of interest from Minsheng Bank that Reuters reviewed. The pledge expired in February 2021, according to the letter.
A Minsheng Bank official who signed the document said in an emailed response to Reuters that the letter of interest was “a trade secret” and didn't respond to questions about funding plans. Spokespeople for Minsheng Bank and ICBC didn't respond to requests for comment.
Rio Energy was hoping for $3.4 billion of funding for the second phase of the power plant, according to a draft contract with a unit of engineering and construction company China Gezhouba Group Corporation (CGGC). The contract, which was reviewed by Reuters, was dated November 2020 and drafted by both companies.
In response to questions about the planned Sengwa plant, CGGC's parent company China Energy Engineering Corporation told Reuters that a subsidiary signed a construction co-operation agreement in 2020. “There is no progress on this project currently,” it said, citing a lack of financing commitments.
PER Lusulu Power plans to build the 2.1GW Lusulu plant in Zimbabwe's western province of Matabeleland North. It announced in 2015 that Chinese financial institutions had agreed to fund its construction, subject to conditions. PER Lusulu Power's website says the company entered into a construction contract with China State Construction Engineering Corporation, which would secure debt finance from Bank of China.
PER Lusulu Power had also sought financing of up to $2 billion for the project from ICBC, according to extracts of a term sheet dated August 2020 viewed by Reuters. The term sheet is a non-binding agreement setting out the terms and conditions for an investment. It was unsigned, and was prepared by ICBC, according to a person familiar with the document.