Chinese group acquires stake in Sunlight Energy

Tinashe Makichi Business Reporter
Yunnan Linkun Investment Group of China has acquired a 50 percent shareholding in China-Africa Sunlight Energy and plans to invest an initial $700 million towards the development of Gwayi Coal-Electricity Integrated Project in Matabeleland North Province. This follows the termination of a joint venture between the initial partners Shandong Taishan Sunlight Investment Company Limited and Old Stone Investments, the local shareholders. The JV was terminated after Shandong failed to mobilise the required funding for the project.

The project, which was granted National Project Status by Government will see the group set up coal mining operations and construct a 2X300 Megawatts thermal power station. “We have secured a new investor to take up a 50 percent stake in CASECO from the previous shareholder; Shandong Taishan Sunlight. Efforts are being made to reimburse the company (Shandong) its initial investment of about $12 million.

“In fact, the new investor is willing to reimburse provided the amount is verified as well,” China Africa Sunlight chief executive Mr Charles Mugari told The Herald Business in an interview on Tuesday.

Mr Mugari said the new investor has capacity to move the Gwayi project forward. An immediate capital injection for running the company will be made available while the company is also engaged in negotiations with a Chinese Bank to secure a loan by the end of this month.

“We have concluded the indicative term sheet. Conclusion of the final loan agreement will be done by the end of this month so that an initial capital injection of $700 million into the project will be done by the beginning of next year,” said Mr Mugari.

He said the termination of the previous joint venture was mutual and there was no bad blood between the two parties. Mr Mugari said since the coming on board of the new investor, CASECO has identified a new EPC contractor, Sinohydro Bureau 3 Corporation Limited and the Bank of China is also expected to fund the project.

“Sinohydro engineers were in Zimbabwe last October for due diligence. A document was completed and we went to China for the signing of the EPC contract on November 18.

The signing ceremony was witnessed by Energy and Power Development Permanent Secretary Patson Mbiriri and Defence Permanent Secretary Martin Rushwaya and the Zimbabwean Ambassador to China, Paul Chikawa,” said Mr Mugari.