THE Zimbabwean government has revived its long-standing plans to construct a multi-billion-dollar fuel pipeline connecting the landlocked country to Mozambique, with the Mutapa Investment Fund (MIF) expected to take control over the project, the Zimbabwe Independent can exclusively reveal.
With a US$16 billion asset base since its establishment in 2023, MIF is in discussion to take over the US$4 billion project after a previous agreement between the National Oil and Infrastructure Company (Noic) and South Africa-based Coven Energy collapsed.
Attempts fell through due to complex inter-governmental negotiations and approval delays from Mozambique, sources said in separate briefings.
This latest effort marks the third attempt to bring the pipeline to fruition. Initially conceived by Noic — then the National Oil Company of Zimbabwe — in 2009, the project was intended to transform Zimbabwe into a regional petroleum hub.
The first agreement, with South African firm, Mining Oil and Gas Services (Mogs), fell apart in 2013, coinciding with the expiration of Zimbabwe’s coalition government between Zanu PF, MDC and MDC-T. In a second bid, Noic partnered with Coven Energy, also based in South Africa, to construct a pipeline from Mozambique’s Indian Ocean coastline to Zimbabwe.
However, this agreement was suspended in 2023 amid disputes and procedural delays from the Mozambican government.
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Noic’s ambitions faltered when Mozambican authorities withheld final approval due to complex internal political conditions, including an ongoing Islamic insurgency that had disrupted the region.
Sources close to the developments told the Independent this week that the ambitious programme would now be implemented by MIF led by its chief executive officer, John Mangudya, the former Reserve Bank of Zimbabwe governor.
Noic, alongside a number of state-run enterprises, were put under MIF, formerly known as the Sovereign Wealth Fund, this year.
“After the deal collapsed with Coven Energy, we have been looking internally at how we can sustain it. This has resulted in meetings with top officials from MIF. So the matter is currently under consideration,” a source, who spoke on condition of anonymity, said.
“They have proposed ambitious plans of engaging with financiers from Abu Dhabi. Negotiations are still in their infancy but things are moving in that direction. Part of the negotiations involved MIF officials and those from the Abu Dhabi National Oil Company.”
Energy and Power Development minister Edgar Moyo referred all questions to Noic chief executive officer Wilfred Matukeni when asked about the status of the second fuel pipeline.
“You could get a comprehensive response from Noic,” he said.
Questions sent to Matukeni were not addressed at the time of going to print.
Among other issues, the Independent wanted to gain understanding on the reasons behind the collapse of Noic’s agreement with Coven Energy and the plans under MIF.
Similarly, questions sent to Mangudya were not addressed at the time of going to print.
This publication wanted to understand how MIF was prioritising the second fuel pipeline project and whether it had successfully engaged with international financing institutions.
The Independent also wanted to find out whether it would use its own resources to bankroll the project.
Relating to how the Coven-Noic deal collapsed, sources said delays in obtaining the green light derailed the plan.
“After the project was endorsed by the Zimbabwe Investment Development Authority and obtained cabinet authority, the next stage was to get similar approval from Mozambican authorities,” another source, who asked not be named, said.
“But internal political developments in Mozambique slowed down progress. Coven Energy and Noic were expecting to get the approval from the Mozambican government but that did not happen.”
Sources familiar with the previous Coven agreement indicated the deal faltered over unpaid consultancy fees for feasibility studies.
“Project partners (Noic and Coven) enlisted the services to carry out the feasibility study. When the study was concluded, Coven Energy, whose responsibility was to meet the cost of the feasibility study, failed to do so. It was at that moment that the project collapsed. The project was effectively dead,” the source said.
“Faced with no choice, local partners had to find money to pay off the consultancy firm to obtain the feasibility study report. That sealed the end of the deal between Noic and Coven Energy.”
Coven director Prince Sivile Mabandla told the Independent that the project involved a number of regional countries, each with its “own policies”.
“We are open to engaging with multiple countries and partners, including Zambia, Democratic Republic of Congo (DRC), Botswana, South Africa and Mozambique, which held its general elections recently.
“There have been several feasibility studies undertaken by various parties over the past seven years and I do not have the records at hand. There are multiple countries and each sovereign country has its own policies,” Mabandla said.
The only existing pipeline is wholly owned and managed by Pipeline Zimbabwe, a subsidiary of Noic.
Noic assumed total control over the Feruka-Harare pipeline when it snapped 50% equity then held by Lonmin, formerly known as Lonrho.
Mozambique owns the length of the pipeline that runs from Beira to Feruka. Private fuel trading firms pay Noic to use the infrastructure.
In 2021, Noic was charging US$0,07 to move a litre of fuel through the Feruka pipeline. Construction of the second pipeline is expected to make use of Zimbabwe’s underutilised storage capacity, which stands at 500 million litres.
Once implemented, the second fuel pipeline-primed as a money spinning project will strategically position Zimbabwe in the regional petroleum industry.