GABORONE – Botswana private equity firm Capital Management Africa has reportedly approached the Botswana Public Officer Pension Fund (BPOPF) with a proposal seeking a recapitalisation loan of US$300 million on behalf of the Zimbabwe Power Company (ZPC), despite reports that Zimbabwe President Robert Mugabe has already vetoed the deal.
The deal, which was brokered by Siqokoqela Mphoko, a CMA shareholder and son of Zimbabwe’s controversial Vice-President Phekelezela Mphoko, has been under negotiation since late 2014 and involves the advancement of a loan which would be re-paid by Zimbabwe at an interest rate of 20%, in addition to power exports to Botswana.
Last week, the deal was thrown into uncertainty when Mugabe ordered the cancellation of the deal, saying the cash and power payment terms of the loan were punitive and “usurious”.
However, CMA has ignored Mugabe’s order and started searching for partners for funds for the deal. BPOPF Chief Executive Officer Boitumelo Molefe told Business Weekly, a local paper, that CMA had submitted a proposal asking them to finance the Zimbabwe credit and power purchase deal.
“We do not have a say as to where they (CMA) invest the money as long as we get our returns. They have approached us to fund the Zimbabwe deal. They say they will be managing a power project and the proposal is currently under consideration by the investment committee,” she said.
In terms of an agreement signed in Harare in October 2015, CMA would provide upfront funding of up to $300 million to help ZPC refurbish the Hwange Power Station. The deal also involved a power supply agreement with BPC importing up to 100MW per month of the power generated from the revived station.
Apart from concerns over the punitive interest rate, Mugabe reportedly cancelled the deal because it “smacked” of corruption. BPC spokesperson Dineo Seleke said CMA had approached them with a proposal to help with the importation of power from Zimbabwe but said no agreement had been signed to date.
Africa News Agency