DESPITE moves by President Robert Mugabe to block the costly US$350 million loan deal between the Zimbabwe Electricity Supply Authority (Zesa) and Botswana’s Capital Management Africa (CMA) brokered by Vice-President Phelekezela Mphoko, the equity firm has reportedly approached the Botswana Public Officer Pension Fund with a proposal seeking a recapitalisation loan on behalf of the local power utility, the Zimbabwe Independent has learnt.
Mphoko, whose son Siqokoqela is a CMA shareholder, wants the power company to access the US$350 million loan at a usurious 20% per annum interest rate. The power utility is in a serious financial crisis as it is owed close to US$1 billion. It is also struggling due to mismanagement and corruption.
Zesa will be required to export power to Botswana as part of the deal.
In January, China offered Zesa a loan of US$1,2 billion to refurbish the Hwange Thermal Power Station.
The Chinese loan, however, requires that government raises a substantial guarantee of at least 15% before accessing the facility, hence efforts to raise the US$350 million.
Reports from Botswana indicate that CMA is on the market looking for funding to finance Zesa.
CMA is an equity company which seeks and provides financial services to businesses that seek recapitalisation. It is one of the leading asset management companies in Botswana.
The company has approached the Botswana Public Officer Pension Fund to access funds.
Boitumelo Molefe, chief executive of Botswana Public Officer Pension Fund, told Botswana’s Business Weekly after the Independent’s exclusive story, that CMA had submitted a proposal asking the pension fund 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 say they will be managing a power project and the proposal is currently under consideration,” she said.
In terms of an agreement signed in Harare last October, CMA would provide upfront funding of up to US$350 million to help Zimbabwe Power Company refurbish the Hwange Power Station.
The deal also involved a power supply agreement with Botswana Power Corporation (BPC) importing up to 100 megawatts per month of the power generated from the revived station.
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.
Government officials last month told Independent that Mugabe expressed concern over the punitive interest rate and also questioned Mphoko’s role in the deal.
Despite Mugabe’s concern, it however appears the deal is still on the cards.
In April Zesa secured cabinet authority to send four people to Botswana to negotiate the deal.
Government sources said the loan payment was supposed to be done through Siqokoqela’s offshore account in Mauritius, which raised eyebrows in government.
Apart from holding a 5% stake in CMA, Siqokoqela also worked as the head of business development at the company from January 2008 to August 2013.
He started when his father was Zimbabwe’s ambassador to Botswana.
Questions are still been raised as to whether Mphoko abused his position as ambassador in Botswana between 2002 and 2005 moonlighting to cut deals for himself and his family as he emerged as a partner in that country’s biggest supermarket chain Choppies.
Mphoko, last month, dismissed the corruption reports, saying it was a mudslinging campaign by his detractors. He, however, failed to address substantative issues raised about him.