China has lent Zimbabwe $319 million to pay for the expansion of its Kariba hydropower station, an upgrade that should help ease electricity shortages in the southern African country, Finance Minister Patrick Chinamasa said.
Zimbabwe produces about 1 200 MW of electricity against a peak demand of 2 200 MW, resulting in long outages that have hit industrial and agricultural production.
"This should go a long way in reducing power outages that characterise our power generation. For us the energy deficit has hamstrung the growth of our economy," Chinamasa said at an event to sign the loan agreement.
The project will take four years to complete and is for two power units of 150 megawatts each. Kariba produces 750 MW at its peak.
The loan, from China Exim Bank, will attract annual interest of 2 percent and has a repayment period of 20 years.
China has emerged as a big lender to Zimbabwe after traditional Western donors stopped supporting President Robert Mugabe's ZANU-PF government over charges of vote fraud and human rights abuses..
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