Tokwe Mukorsi Deal Signed

Source from:  herald.co.zw By Perry Kaande Tuesday, May 27, 2008 05/28/2008

THE Infrastructure Development Bank of Zimbabwe signed a memorandum of understanding with Loita Capital International, Zimbabwe National Water Authority, Tongaat Hulett and its Zimbabwean operation Triangle Sugar Corporation for the construction of the Tokwe Mukorsi Dam in the Lowveld. The dam, which is expected to cost upwards of US$65 million will enable the cane farmers of the Lowveld to expand their plantations, thereby increasing the country's overall sugar production for export. IDBZ public relations officer, Violet Mufori said: "The Government of Zimbabwe considers it (Mukorsi Dam) to be of strategic importance to the economic and social development of the area (Lowveld) as the extra water will enable farmers to increase sugar cane production." Triangle Sugar Corporation would become the principal off-taker of the water from the project although this is subject to final agreement. "Triangle viewed the project as a key component of its expansion objectives that would see national sugar production capacity increase from 600 000 tonnes to 1 million tonnes". The strategy is also consistent with Tongaat's strategy of expanding operations in low cost sugar producing countries such as Zimbabwe. Under the terms of the MoU, Loita and IDBZ would jointly advise, structure and lead the capital raising for the project. IDBZ would be responsible for facilitating negotiations with the Zimbabwe Government and restructuring "The Project" as well as facility administration and management duties. Mandated by Government, on a best endeavour basis to source financing for completion of the project and liquidation accumulated arrears of US$17 million due to the contractor, "IDBZ in turn engaged Loita to assist in resource mobilisation for the project and secondary infrastructure". Loita Capital Partners International is an investment-banking firm incorporated in Mauritius. Another signatory to the MoU, Zinwa would facilitate negotiations for any concessions, provide capacity to manage and maintain the dam operations as well as manage and supervise the construction of the dam. Started in 1998, the project came to a standstill the following year when funding under bi-lateral agreements between the Italian Government and Zimbabwe was suspended. Two years ago Government approached Triangle and Hippo Valley Estates to explore possibilities of raising foreign currency to complete the dam. The sugar producing firms party to the MoU would also be expected to provide technical assistance to outgrowers, assist in the provision of bulk purchases of production inputs; cane haulage and other extension services to outgrowers. Enditem