Zimbabwe energy sector in quandary as key funders ‘pull’ out of coal projects

Photo: NewZwire

Speaking at the United Nations General Assembly, China said it will no longer fund new coal-fired power projects abroad.

Apparently, in Zimbabwe, potential funders of RioZim’s Sengwa project had already been pressured to drop what would be Zimbabwe biggest ever energy investment.

Recently, the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by assets, came under pressure to withdraw funding from Zimbabwe’s planned 2,800MW coal-fired power plant at Sengwa.

This left what is potentially the country’s largest energy investment in doubt.

Zimbabwe country holds estimated coal reserves of 12 billion tonnes, according to data from the Ministry of Mines, and is escalating its search for investment to exploit it.

However, environmental activist groups that have been lobbying ICBC to cancel the project funding claim the bank has committed not to fund the project.

“ICBC also confirmed that they will not fund the Lamu Coal Project in Kenya as well as the Sengwa Coal Project in Zimbabwe,” according to Go Clean ICBC, part of a coalition of 32 climate activist groups.

There was no comment from RioZim or ICBC. The bank is the world’s biggest lender, with assets of US$4.9 billion last year.

Rio Energy, a unit of RioZim, last year announced it had reached an agreement with China Gezhouba Group Corporation (CGGC) to build the long-delayed power plant for US$3 billion.

CGCC, a subsidiary of the China Energy Engineering Corporation, one of the world’s largest construction firms, was to help raise funding for the project.

However, RioZim would now have to seek alternative funding if ICBC confirms it is pulling out. -NewZwire