A TEAM from Indian firm Jindal Africa Investments recently visited the country to finalise a US$350 million joint venture with power utility Zesa, the Zimbabwe Independent can reveal.
The partnership aims to refurbish six units at Hwange Thermal Power Station.
According to Mutapa Investment Fund (MIF) chief executive officer John Mangudya, the talks were “successful”.
“Yes, the team from Jindal was in the country to finalise on the rehabilitation agreement of Hwange Units 1 to 6 with Zesa. The meetings were successful,” he told the Independent without divulging more information.
Reached for comment, Zesa Holdings chairperson Sydney Gata said he was out of the country.
However, sources revealed that the team met with MIF, power utility Zesa, and the Zimbabwe Investment and Development Agency.
Last year, MIF approved the joint venture deal, which will be implemented under a rehabilitate, operate and transfer (ROT) framework.
This significant investment is expected to add approximately 400 megawatts (MW) of electricity to Zimbabwe’s national grid, offering some relief as the country continues to grapple with severe power shortages.
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Currently, Zimbabwe faces daily load-shedding of up to 16 hours, with businesses incurring heavy costs by relying on generators.
Large corporations have reported spending up to US$300 000 per month on fuel, further driving up production costs. The cost of using alternative energy sources is about 50% higher than conventional electricity.
According to Mangudya, the restoration project will be funded by the investor.
“This investment, which constitutes a public-private partnership arrangement, will enhance the supply of electricity into the grid by around 400MW to 840MW from the rehabilitation of these six units,” he told the Independent last year.
“This initiative will add electricity into the grid by around 400MW. The estimated cost of this project is around US$350 million.”
President Emmerson Mnangagwa, in August 2023, commissioned Hwange power station’s Units 7 and 8, which added 600MW to the national grid.
The project was done by a Chinese firm, Sinohydro, at a cost of US$1,5 billion.
Jindal Africa is a subsidiary of Indian multinational conglomerate Jindal Steel and Power (JSP), which is part of the diversified OP Jindal Group.
With a global worth of approximately US$12 billion, the OP Jindal Group is a prominent player in various sectors, including steel, power, mining, coal-to-liquid, oil and gas, and infrastructure.
Employing over 50 000 people worldwide, Jindal Africa has operations in South Africa, Mozambique, Botswana, and Namibia.
Following its transformation from the Sovereign Wealth Fund in 2023, MIF has been building the framework for increased investments.
Currently overseeing 30 parastatals, many of which are near insolvency, MIF has a mandate to reverse the decline in the contribution of state-owned enterprises (SOEs) to Zimbabwe’s gross domestic product (GDP).
The SOEs’ share of GDP has plummeted from 40% in the 1990s to just 12% in 2021. Mangudya has previously stated that his goal was to buck the trend and bring these companies back to their previous level of performance.
A large number of them are burdened by legacy debts.
MIF, working through Zesa, is putting in place a number of initiatives to address the power outages bedevilling the country.
These measures include accelerating the installation of smart metering and prepaid meters to all users of electricity across the country.
This is meant to align the supply of electricity with effective demand and also improve debt collection. Zesa is also upscaling the installation of net-metering to enhance electricity supply into the grid from the excess power from private individuals and entities with their energy sources such as solar.
Some of the firms under MIF include the National Railways of Zimbabwe, Air Zimbabwe, Zimbabwe United Passenger Company, Cottco, Kuvimba Mining House, Silo Investments, National Oil Company of Zimbabwe, PetroTrade, POSB, TelOne, Arda Seeds, Zimbabwe Power Company, among others.
