The 2 800 Megawatt Sengwa Power Station’s fate continues to be stuck in uncertainty after RioZim announced that financiers and lenders have taken a “conservative approach” from earlier pledges to bankroll the project.
RioZim, with a massive mining portfolio is running this project through RioEnergy, its energy subsidiary.
Earlier this year, China’s Industrial and Commercial Bank of China (ICBC) dumped a plan to finance a US$3 billion into the coal-fired power plant citing “environmental problems”.
This follows close scrutiny by environmental activists on funding of coal projects
In its Half Year trading update to June, RioZim said the project was however still alive despite financing challenges.
“As the COVID-19 pandemic continues to evolve across the world, financiers and lenders took a conservative approach making it difficult to bring financial closure for this project,”
“However, engagements with potential financiers for the projects remain alive despite the challenges and uncertainties brought about by the COVID-19 pandemic,” said RioZim.
Nevertheless, RioEnergy continues to seek alternative financiers while it also progresses with a solar project.
“During the period, the Company conducted the Environmental Impact Assessments (EIA) for all the proposed solar sites at our various mines which are a prerequisite before implementation of the solar projects,” said RioZim.
The EIAs are expected to be concluded in the second half of the year.
The Group experienced a 4 percent decline to 564 kg in mineral output from prior year at its mining units owing to power outages.
“The depressed production was mainly attributable to the rain induced power outages and plant breakdowns experienced in the first quarter of 2021 which stifled plant throughput across the Group’s mines,” said RioZim.