THE Kariba South hydro expansion programme hangs in the balance after it emerged that Sino Hydro, a company awarded the tender for the project, might not get funding from a Chinese bank as Zimbabwe is in arrears with the institution.

According to a report by the Parliamentary Portfolio Committee on Mines and Energy, Zimbabwe owes Chinese Exim-Bank US$27 million for agricultural equipment acquired through the Industrial Development Corporation and Farmers' World. Government has now directed the national power utility, Zesa Holdings, to pay the debt.

"Government should be encouraged to pay this debt of US$27 million so that the project of expanding Kariba South can take off the ground," said the report.

"Sino has indicated that it will not release funding for Kariba South from the Chinese Eximbank until the US$27 million has been paid off."

Energy and Power Development Minister Elton Mangoma referred all questions to Finance Minister Tendai Biti, who could not be reached by the time of going to print.

The extension of Kariba South station was scheduled to start early next year.

It would add 300 megawatts to the national grid.

Government will soon announce a contractor for the expansion of Hwange Power Station.

The two last bidders for the project are finalising their commercial evaluations, said Minister Mangoma.

Zimbabwe generates an average of 1 200MW, against a demand of 2 200MW.