1 September 2017

Zimbabwe: U.S.$300 Million for Kondo Dam

The Agricultural and Rural Development Authority (ARDA) has met three South African potential suitors to fund the massive $300 million Kondo Dam in the Middle Sabi region.

The project involves the construction of a concrete faced rock fill dam, an earth fill saddle dam and hydro-power generating plant.

Upon completion, Kondo Dam will store 3, 5 billion cubic metres of water for power generation and irrigation development in the Chisumbanje area, which lies in the south eastern part of the country.

The dam has potential to generate 200MW and has a high eco-tourism potential, which will benefit the Zimbabwean economy. The parastatal also wants to expand other projects in the area.

Arda has since signed Memorandum of Understanding (MoUs) with three South African potential suitors to kick start the project that the parastatal has opted to keep under wraps.

Presently, Middle Sabi and Chisumbanje Estates are relying on water from Osborne and Rusape dams and this potential investment could expand to 50 000 hectares from the current 10 000.

ARDA chairman Mr Basil Nyabadza, told The Herald Business that the Kondo Dam investment will turn around the fortunes of the parastatal and the agriculture sector in general.

"Over the years we have been facing water challenges at Chisumbanje and Middle Sabi, therefore, we are looking at expanding the seed cane and sugarcane which will lead to the creation of an additional ethanol plant in the area. The expansion exercise we are embarking on depends heavily on water investment. As we speak we have met various investors in South Africa who are willing to invest at least $300 million for the construction of Kondo Dam, what's left for us now is to see who has the least interest rates over a period of time.

"It's not long before we announce our possible partners in the potentially biggest dam in the land, which will have a capacity of over 3,5 billion cubic metres of water for power generation and irrigation for Chisumanje area. We also need to attend to heavy siltation in Sabi River because water flow is now an issue, which will lead to expanded production along the river," said Mr Nyabadza.

Depending on water availability, Arda plans to open up an additional 5 000ha on an annual basis to expand sugar cane production for the ethanol project. The project will enhance water storage capacity that will trigger additional horticultural activities in the Sabi area and surroundings.

Osborne Dam and Lesape Dam are feeding into the plantation and the two water sources cannot sufficiently support the expansion.

Mr Nyabadza said the design stage of the dam was completed. Kondo Dam is located approximately 3,6km south of the Save River and Tsungwizi River confluence.

Meanwhile Green Fuel expansion programme also involves construction of two additional plants with combined capacity of 40 million litres of ethanol per month at a cost of $540 million.

About $400 million will be required to develop the farmland measuring 40 000 ha. Green Fuel started operations in 2012 and its operations were boosted by the introduction of mandatory blending. Arda, which is now operating at 75 percent from 15 percent five years ago, is promoting production of non-traditional dedicated export crops such as pecan nut, macadamia and cashew nuts at all estates in Manicaland and through small-scale out growers in line with its mandate to bring positive change in rural communities.

Arda owns 22 estates across the country, which translates to about 100 000 hectares, most of which have been lying idle owing to viability challenges largely emanating from poor funding.

In the Manicaland area, the parastatal is engaging potential investors to boost production at Katiyo Tea Estate (Mutasa), Rusitu Estate (Chipinge), Gairezi Estate (Nyanga), Chisumbanje and Middle Sabi (Chipinge) where the authority partnered Macdom and Ratings Investments to form Green Fuel, which owns the Chisumbanje ethanol plant.

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