The National Oil Infrastructure Company of Zimbabwe (NOIC) has entered into a joint-venture agreement with Coven Energy Limited to establish a second fuel pipeline from Beira to Harare, government said yesterday, a move which makes Zimbabwe as the hub for the transportation of refined petroleum products in the Sadc region.
The project will result in the NOIC and UK-based Coven Energy entering into a 50:50 public-private partnership.
In a post Cabinet media briefing yesterday, Information, Publicity and Broadcasting Services minister Monica Mutsvangwa said the pipeline will be serving Zimbabwe, Botswana, and South Africa with the project expected to create employment opportunities as well as generate foreign currency for Zimbabwe.
“The partnership will be for a period of 30 years. The pipeline will also help reduce vehicular congestion and the smuggling of petroleum products and the pipeline will be built over four years, at an estimated cost of US$1.3bn,” Mutsvangwa said.
Cabinet resolved that the parties sign a Memorandum of Understanding for purposes of conducting a bankable feasibility study which they will fund.
The project also wants to connect the pipeline to South Africa, Botswana, Zambia, Malawi, and the DRC as part of a long-term plan.
Experts in the oil industry said the deal would radically transform Zimbabwe into a regional petroleum hub, but effectively tilt the dynamics of the local industry largely dominated by Sakunda Holdings owned by business mogul Kuda Tagwirei.
The United Kingdom based firm plans to roll out the project in phases, with the first stage set to receive an US$850m capital injection with the rest expected to come in later stages.
Cabinet also approved the proposed partnership between Bulawayo City Council and Tendy Three (Pvt.) Ltd on the Bulawayo Vehicle Parking Management System Project and proposal for investment by a Belarusian independent power producer in a 100 MW solar energy plant.
Cabinet also approved the proposed partnership involving ZMDC, SIM SEA Pvt Ltd and Honghua International for the resuscitation of Angwa Shaft and the processing of the dump at Chidzikwe.