Zimbabwe might face challenges accessing the US$1 billion loan facility from China Eximbank for Hwange Power Station expansion following the change of functional currency that resulted in funds that were held in an escrow account to securitise an earlier loan being converted to local currency.

This emerged yesterday during a briefing between Zesa officials and newly appointed Minister of Power and Energy Development Advocate Fortune Chasi who was on a tour of power generation facilities in Kariba.

Zimbabwe Power Company (ZPC), the generation arm of State power utility Zesa, acting managing director Engineer Robson Chikuri, said China Eximbank had verbally expressed its displeasure about the situation.

Fears now abound that the bank may soon register its misgivings in writing, indicating the escalation of the gravity of its reservations, which might strain the relationship between the parties.

At this point, Eng Chikuri said, there will be need to urgently address the issue, which posed serious threat to draw downs on the US$1 billion loan for Hwange extension project, a programme already underway.

Zimbabwe cannot afford to delay the Hwange units 7 and 8 expansion programme at a time the country is gripped in the throes of a debilitating power deficit, which has spawned load-shedding.

The escrow account funds related to a US$320 loan million Zesa received from China Eximbank for the capacity expansion of Kariba South power station.

The 300 megawatts extension project, completed in March last year and commissioned by President Mnangagwa, cost just over half a billion US dollars.

State power utility, Zesa, was obligated to maintain an escrow account balance of US$28 million held in the form of trust funds that would be accessed by China Eximbank if the borrower defaulted.State media