Zimbabwe Economic News Today: Ethanol Fuel project, Electricity Generation, Capital Projects and Investment

Ethanol project to resume

First, we look at the The Chisumbanje ethanol project, which Newsday reports is set to resume operations following Cabinet’s decision to enforce a 5% mandatory blending, while the $600 million green fuel project will now operate in a joint venture agreement with government through the Agricultural Rural Development Authority (Arda).

The project, which was to operate under a 20-year Build Operate and Transfer (BOT) agreement with Arda, suspended operations in February this year amid fierce political bickering and resistance by motorists who were sceptical about the product.

Deputy Prime Minister Arthur Mutambara, who last month led an inter-ministerial taskforce to resuscitate the project, told journalists in Harare yesterday that Cabinet had approved the recommendations drawn up by his committee and he had also advised the company. Thursday 20 September 2012. Newsday.

Zesa Slashes Mozambique Bill

We note that the National Power utility Zesa Holdings has reduced its debt to Mozambique’s Hydro Cabora Bassa from U $75 million to US$2 million, a senior Government official has said. Energy and Power Development permanent secretary Mr Patson Mbiriri said Zesa Holdings subsidiary, the Zimbabwe Electricity Transmission and Distribution Company, had prioritised debt repayment for power supply from HCB.

“Accordingly, as of last week, the debt stood at US$2,67 million which should be cleared in the near future,” he said “An amount of US$1,7 million is being paid per week towards extinguishing the said debt which stood at some US$75 million at one point,” he added. Mr Mbiriri hinted that the Government was likely to negotiate for an increase in supply after the debt is cleared. “We currently received a firm supply of 100MW and we hope that we can be availed more in terms of a new power allocation at the end of ongoing negotiations,” he said.

Zimbabwe needs 2 200MW at peak times but only generates around 1 000MW while importing a significant chunk from regional power utilities. Rising debt had resulted in some regional utilities reducing supply to Zesa Holdings, which also used to import power from the Democratic Republic of Congo and South Africa. Thursday 20 September 2012. Herald

Old Mutual to Invest US$200million

Old Mutual intends to invest about US$200 million in private equity and infrastructure next year, outgoing chief executive Mr Luke Ngwerume said yesterday. “We are hoping that at least US$100 million will be invested in private equity next year,” said Mr Ngwerume in an interview with the Herald Business.

“We would also want (to invest) US$100 million per year in infrastructure. We really like infrastructure. It is a very good way of stimulation. We were the major source of funding for Zesa, Hwange, Ziscosteel (now NewZimsteel) and municipalities. It is not that we have money in our bank (account) but we have realised that we have potential to raise capital.”

Mr Ngwerume, who is set to leave the company end of this month, said the sectors that would be targeted include mining, agriculture, tourism and services. Currently, Old Mutual’s investment in private companies is around US$80 million. Thursday 20 September 2012, Herald

Vic Falls Airport Expansion Project on Course

THE Government has expressed satisfaction with progress being made towards the expansion of the Victoria Falls International Airport ahead of the United Nations World Tourism (UNWTO) General Assembly in August next year.

To show its commitment towards the project and the co-hosting of the general assembly, the Government engaged a Chinese contractor to undertake the expansion of the airport to allow it to handle a larger volume of traffic.

In an interview after touring the airport to assess progress made so far, Transport, Communication and Infrastructural Development Minister Nicholas Goche said the ground had been cleared and the contractor was in the process of transporting the material to be used from Harare to the site.

“We have agreed with the contractor that the terminal building cannot be completed before the congress but the runway will be completed in time,” he said. Thursday 20 September 2012, Chronicle