A Zimbabwean company that had been banking on Chinese financing to build a major coal-fired power plant says it is now looking for alternative backers as China pulls back on funding such projects overseas.
The effort by RioZim Ltd, one of Zimbabwe’s biggest mining and energy companies, reflects how China’s recent U-turn on foreign coal financing is forcing developing nations across Africa and Asia to rethink their energy plans.
Rio Energy is considering alternative financing plans.
“We are still in the market to fund the project and we will work with all possible funders, including the Chinese.”
China, which had been a top funder of coal power projects around the globe, announced in September that it would not build new coal projects abroad as part of efforts to curb future carbon emissions.
Energy and climate specialists are watching to see the impact, including whether it will force a speedier shift to cleaner energy, result in other funders stepping in or lead to power shortages. Zimbabwe, which already suffers from a lack of electricity, has among the biggest coal reserves in Africa.
Plans for the multibillion-dollar Sengwa power plant in north-west Zimbabwe involve more than doubling the country’s current electricity capacity.
RioZim’s energy division, Rio Energy, had been hoping for funding for the planned plant and associated coal mine from Chinese banks Industrial and Commercial Bank of China (ICBC) and China Minsheng Banking Corporation Ltd.
A Zimbabwe government spokesperson declined to comment on the status of either projects. He said Zimbabwe has the right to exploit its coal resources if needed.