20 December 2012

Zimbabwe: U.S.$2 Billion Gas Project Commissioned

THE US$2 billion coal and methane gas project expected to ease electricity woes in the country and create about 4 000 jobs, in the Gwayi area of Lupane will start next month.

The joint venture project between Oldstone Investment and Shan Don Sunlight Energy Company of China would see the companies embarking on coal extraction and power generation projects next year.

Ultimately, ailing industry and commerce are expected to be rejuvenated, as about 1 800 megawatts of electricity is set to be generated from thermal power stations to be set up by the firms.

In a speech read on his behalf by Defence Minister Emmerson Mnangagwa at a groundbreaking ceremony for the venture in Gwayi yesterday, President Mugabe said it was the first time the country had undertaken a project to alleviate power shortages since they became apparent five years ago.

"I consider this project as beneficial to Matabeleland North Province and the nation as a whole and a well-timed one, for the country has been in short supply of energy since 2007.

"The success of this project will no doubt provide the necessary impetus for the development of our economy, which has been crippled by the power deficit and illegal sanctions," said the President.

Benefits of the project, he said, include employment creation, construction of social amenities, infrastructure development and expansion of agriculture through fertiliser production.

"All these benefits will start here in Matabeleland and cascade to other parts of the country.

"It is only through innovation such as this that we can pull the country out of the woods in the face of illegal sanctions and limited lines of credit. It is indeed high time that we have a paradigm shift in our approach to development and realise that the traditional way of financing such projects from the fiscus loans is not feasible at the moment."

He said the national debt was high and it was time to consider alternatives like joint ventures and Build Operate and Transfer models.

The President said such initiatives were attractive, as technical partners would come in as investors, not contractors, thereby bringing foreign direct investment accompanied by the necessary technology and skills to ensure they guarantee the performance of investment.

"It is therefore important to note that these alternative funding models are based on wealth creation and don't increase the country's debt burden," he said.

President Mugabe said such significant national projects required co-ordination from all ministries and departments.

He said it would be a shame if political bigotry stifled such important initiatives.

"We should rise above such naivety and pull together when it comes to achieving national development and safeguarding our national interests."

The President said the Minister of Defence had extended his appreciation to the Ministry of Environment and Natural Resources, Ministry of Water Resources Management and Development and the Ministry of Mines and Mining Development for working together, although it presented conflict of interest for the ministries.

"Where our ministry policies are at variance and appear to jeopardise this project, it is the interests of the project that remain paramount.

"Of course, it is expected that the project should comply with all regulations, especially to safeguard the environment. In this regard, it is important to strike a balance between environmental protection and national interests of overall national development, such that at the end the project benefits are realised with minimum damage to the eco-system," he said.

The President extended his appreciation to China for being always a friend to Zimbabwe, saying the project cemented further, the friendship and paved way for more beneficial economic cooperation between the two countries.

Reading a speech on behalf of Minister Mnangagwa, the Minister of State for State Security in the President's Office, Dr Sydney Sekeramayi said any event that threatened the growth of any sector of the economy, jeopardised national security.

"Any process which does not contribute to securing these interests will naturally constitute a threat and would obviously provoke a response from the Ministry of Defence, whether benign or otherwise," said Minister Mnangagwa.

He said the development of other sectors of the economy depended on the adequate supply of power to the extent that event well meaning investors have been hesitant to invest in the country.

The acting Minister of Mines and Mining Development, who is also the Minister of Environment and Natural Resources Management, Francis Nhema said the project would be a timely boost as it came at a time when the energy sector was hugely depressed due to high demand for electricity, which is central to industrial development of any economy.

Chinese Ambassador Mr Lin Lin said next year, China would increase its cooperation with developing countries including Zimbabwe to achieve national benefit.

The chairman of the China Africa Sunlight Energy, Mr Wang Xinjia said he foresaw unprecedented levels of development in Matabeleland North and the whole of Zimbabwe due to the project.

"Several downstream businesses such as fertiliser and tyre products manufacturing, brick moulding, and liquid gas processing for several use shall be done here," said Mr Wang.

China Africa Sunlight was given the green light to start operations after obtaining an Environmental Impact Assessment EIA) from the Environmental Management Agency (EMA) in October.

The event was witnessed by Zimbabwe Defence Forces commander, General Constantine Chiwenga, Minister of Agriculture, Irrigation and Mechanisation Development Dr Joseph Made, Matabeleland North Governor Thokozile Mathuthu and her Bulawayo counterpart Cain Mathema, heads of Government departments, traditional leaders and scores of villagers.

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