HARARE – Listed resources firm, RioZim, is in discussions with a potential investor to kick-start its $2,2 billion Sengwa thermal power project.
Anticipated to result in the generation of 2 400 megawatts (MW) of power, the project has been on the cards since the 1990s.
RioZim, which began actively pursuing the project in 2014, has been failing to secure financial muscle to help the mooted thermal project take off although hope has been rekindled.
Chief executive, Bheki Nkomo, told journalists after the firm’s Annual General Meeting in the capital on Thursday that discussions with a potential investor were underway, hence there was optimism.
“We are now discussing with someone whom we think has the financial muscle,” the RioZim boss said without disclosing the name of the potential investor.
Sengwa has reserves of 1,3 billion tonnes of coal and RioZim anticipates to tap into this bed to help ease power shortages in Zimbabwe, which presently consumes 1 400 MW daily from 2 200 MW a decade ago on the back of industry collapse and the use of pre-paid meters.
The country in turn imports about 400 MW from South Africa’s Eskom and Mozambique to supplement its 842 MW output as at end of May.
The RioZim project — which obtained a 30-year licence to operate the facility from the Zimbabwe Energy Regulatory Authority in September last year — has been linked to Nigerian billionaire, Aliko Dangote.
Dangote who expressed interest in power generation investments when he visited the country in 2015 reportedly considered partnering with RioZim through Black Rhino Group, a $5 billion African infrastructure fund in which United States private-equity group, Blackstone Group LP, is a co-investor.
The plant, which was designed by Beijing-based state-owned Chinese company, State Nuclear Electric Power Planning Design and Research Institute, also saw RioZim lobbying South Africa’s electricity utility to buy from the coal-fired Sengwa facility to help attract investors.
Meanwhile, Nkomo said RioZim’s operations in the first quarter were disrupted by “excessive power cuts, which affected production hours.”
“… This led to a loss in production time at all the mines and coupled with the heavy rains in the first half, we lost ground.
“Weather in the first quarter affected the gold operations… but in the second half we began to recover and we are optimistic to meet our full-year targets,” he said.
The firm recently acquired Falcon Gold’s Dalny Mine Complex (DMC) for $8 million, with the resources firm saying it would pay $250 000 for DMC and $7,5 million towards the company’s loans.
The conclusion of the acquisition of DMC will result in RioZim’s gold production unit — RioGold — having three operating mines including Cam & Motor and Renco.
According to the firm, the acquisition of DMC will see RioGold producing additional gold of approximately 50 kilogrammes per month for the first 12 months and 100 kilogrammes per month thereafter.
The additional production is anticipated to improve profitability, cash flows and balance sheet position of RioGold.