China's Xi in Zimbabwe to sign power, infrastructure deals

HARARE (Reuters) - Chinese President Xi Jinping arrived in Zimbabwe on Tuesday, the first visit by a Chinese leader since 1996, amid expectations that he would sign deals to fund infrastructure, electricity generation and other projects.

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Zimbabwe, which became a pariah in the West after President Robert Mugabe’s government was accused of rigging votes and human rights abuses, has increasingly turned to China for investment to help an economy desperate for new infrastructure like roads, power and water.

Zimbabwe and China’s Import and Export Bank is expected to loan Harare more than $1 billion to fund the 600 megawatt (MW) expansion of Hwange coal power station, officials said.

Xi plans to travel to South Africa on Wednesday, where he will meet President Jacob Zuma and later co-chair the Forum on China-Africa Cooperation summit in Johannesburg.

Zimbabwean Finance Minister Patrick Chinamasa said four agreements on electricity generation, including the expansion of Hwange would be signed, as well as deals on road construction and infrastructure development during Xi’s two-day visit.

China’s Sinohydro Corp won the $1.5 billion bid to add two generation plants at Hwange in western Zimbabwe in October last year, in the most ambitious move yet to tackle the country’s crippling electricity shortages.

“Financial closure has been reached and the agreement for Hwange 7 and 8 will be signed today,” Chinamasa told Reuters during a ceremony to welcome Xi at an airport in Harare.

Noah Gwariro, managing director of state-owned Zimbabwe Power Company, which owns Hwange, said engineering, procurement and construction of Hwange would cost $1.175 billion while interest, bank charges and Zimbabwe’s down payment for the project would cost $325 million.

China is Africa’s largest trading partner and the trade volume between them amounted to $220 billion in 2014, according to China state news agency Xinhua. Its investments in Africa amounted to $32.4 billion at the end of 2014, according to London-based BMI Research.

Africans broadly see China as a healthy counterbalance to Western influence though Western governments charge China of turning a blind eye to conflicts and rights abuses as they pursue trade and aid policies there.

Zimbabwe’s economy is struggling to emerge from a recession between 1999-2008, which saw gross domestic product shrink by 45 percent. On Aug. 25 Mugabe said his country’s economy was poised for a major take-off with China’s help.

Editing by James Macharia and Anna Willard