Selous solar project for Afrochine’s smelter gets a parent-company payment guarantee

A direct agreement signed in Harare puts Zhejiang Dinson Holding Group behind the electricity payments its subsidiary Afrochine Smelting owes the 115MW Selous Solar PV Project in Zimbabwe, adding security for lenders led by the Trade and Development Bank as the plant heads for commissioning in 2027.

A US$87.5m long-term facility led by the Trade and Development Bank and a US$65m bridge from Sinohydro Leasing International, a PowerChina subsidiary, are financing the 115MW Selous Solar PV Project in Zimbabwe, where a direct agreement signed in Harare last week puts Zhejiang Dinson Holding Group behind the electricity payments its local subsidiary, Afrochine Smelting, owes the developer and its lenders.

FBC Bank has added a US$3m facility underwritten by Old Mutual, and the Insurance and Pensions Commission has granted the project Prescribed Asset Status, which opens it to local pension funds and other institutional investors.

Victor Utedzi, chief executive and managing director of African Transmission Corporation, whose subsidiary Centrachine is developing the plant, said that “financiers need confidence not only that power will be generated, but that it will be paid for”, and that “this agreement supplies a critical additional layer of security”.

Afrochine, a ferrochrome smelter at Selous, signed a 25-year power purchase agreement for the plant’s output, ATC said in 2023, and PowerChina’s Yellow River Corporation will build the project, which ATC and Centrachine won against more than 30 local and international consortia.

Energy and Power Development Minister July Moyo, who officiated at the signing, said the government is working to integrate about 1,500MW of privately generated captive power into the national grid, and told the partners that “if we are going to expand this economy to US$45 billion, electricity generation must grow exponentially”.

PowerChina has worked in Zimbabwe for 16 years and built the 300MW Kariba South Extension and the 600MW Hwange Units 7 and 8, and the Selous plant, expected to employ at least 300 people, is due for commissioning in October 2027, a date Moyo asked the partners to bring forward to July.

Images: Centrachine