28 October 2019

Chinese financial institutions have suspended the
funding of three big infrastructural projects totalling US$1.324bn after the
government of Zimbabwe raided and diverted US $10m from an escrow account for
the Robert Mugabe International Airport expansion project.

The affected infrastructural projects include the
US $1.1bn Hwange 7 and 8 refurbishment project, the US $71m NetOne expansion
project and US $153m Robert Mugabe International Airport expansion; which are
at various stages of implementation. They were being funded through various
loan facilities secured from the China
other financial institutions.

The seized funds, which were converted by
government, through the Reserve Bank of Zimbabwe (RBZ) into the local unit, were raided from
an account holding investment capital for the expansion of the airport at the
beginning of the year where the airport project was being undertaken by Jiangsu International and getting funds through a concessional loan facility from China
Eximbank and other financial institutions.

Once the airport is operational, the project will
transform it into a modern facility, which will increase its capacity from
handling two million travellers to about six million annually.

When completed, the expansion of the Hwange plant,
which is 22% complete, is expected to add 600MW to the national grid. The
project has created 3 000 jobs since commencement last year and is set for
completion in 2023. The project is being implemented by Sinohydro,
one of the largest construction companies in the world.

The NetOne project was meant to expand the company’s (NetOne)
mobile telecommunications network through setting up and upgrading base stations
across the country.

The suspended projects are among the several multi-billion dollar sectoral infrastructural deals China lined up for Zimbabwe when President Emmerson Mnangagwa visited Beijing where he met Chinese leader Xi Jinping in 2018.

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