Vice-President Phelekezela Mphoko tried to facilitate a costly US$350 million loan deal between the Zimbabwe Electricity Supply Authority (Zesa) and Botswana’s Capital Management Africa (CMA) where his son is a shareholder, but was stopped in his tracks by President Robert Mugabe who rejected the suspicious deal, the Zimbabwe Independent has learnt.
Zesa senior managers said this week Mphoko, using his son Siqokoqela’s links with CMA, wanted the power company to access a US$350 million loan at a usurious 20% per annum interest rate.
Siqokoqela worked as the head of business development at CMA from January 2008 to August 2013, starting when his father was still Zimbabwe’s ambassador to Botswana. He holds a 5% stake at the financial services company.
Questions are still been raised as to whether Mphoko abused his position as ambassador in Botswana moonlighting to cut deals for himself and his family as he emerged as a partner in that country’s biggest supermarket From Page 1
According to his LinkedIn account, Siqokoqela’s duties included, among many others, “establishing investment opportunities for our group in the form of development projects, infrastructural projects, and finance financial institutions such as banks”.
“CMA had Pula 2,6 billion assets under its management and it was my job to find good investments for our group. I became a 5% shareholder of the company. CMA was the number one leading asset management company in Botswana and the only company that had the skills and expertise to manage annuity portfolios in the whole of Botswana,” Siqokoqela states on his account.
Zesa is seeking US$350 million in order to secure a US$1,2 billion loan facility offered by China Exim Bank to refurbish Hwange Thermal Power Station.
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.
In January, China offered Zesa a loan of US$1,2 billion to refurbish the Hwange Thermal Power Station. The Chinese loan requires that government raises a substantial guarantee, of at least 15%, before accessing the facility, hence efforts to raise the US$350 million.
Chinese leader President Xi Jinping signed for the release of US$1,2 billion for Hwange, with a repayment interest rate of 2% annually when he visited Zimbabwe in December last year.
Official sources said Mphoko tried to help secure the loan facility apparently driven by his son’s interest and thus self-interest. However, government officials said Mugabe rejected deal, saying it was self-seeking. He reportedly grilled Mphoko over it on Monday last week.
“Mugabe rejected the loan deal and even questioned Mphoko over it during their Monday briefings last week. He warned him not to be involved in Zesa affairs, effectively blocking the arrangement,” a senior government official said. The government official said Zesa two months ago secured cabinet authority to send four people to Botswana to negotiate the deal. “Four people travelled to Botswana from April 11 to April 15 to meet CMA officials for discussions,” the official said.
The source also said the repayment of the loan was supposed to be done through Siqokoqela’s offshore Mauritius account, which raised suspicions about the whole deal.
Zesa group chief executive officer Josh Chifamba, however, denied this, saying his company did not hold loan negotiations with CMA.
“I am in Gaborone right now,” he said yesterday. “No negotiations for a loan have been held with CMA, but instead talks for possible power exports to Botswana.”
Upon being pressed to explain the involvement of CMA, Chifamba said: “They are facilitating for Botswana Power Company. We obtained cabinet authority to send the (Zesa) team to negotiate for power exports.”
However, an Energy ministry official said the process raised questions.
“Government does not send negotiators to where they want to supply something, electricity in this case, but instead the Botswana Power Company would have sent a delegation here if that was the case,” the official said. “The real matter here is a loan arrangement, not power exports.”
Mphoko’s deal comes at a time when the power company is rocked by tender scams.
As reported by the Independent in the past four weeks, Zesa is reeling from a series of scandals, including the US$194 million-a-year Dema diesel power plant deal which would leave the struggling ZPC and Zimbabwe Electricity Transmission and Distribution Company, another Zesa subsidiary, in deeper dire straits.
The corrupt deal, given to Mugabe’s in-law Derrick Chikore, elder brother to Simba who is married to the president’s daughter Bona, and Sakunda Energy boss Kuda Tagwirei, was later revised down by about 50% to US$83 million due to pressure.
Energy experts say ZPC could have saved approximately US$200 million over three years had it explored cheaper alternatives.
Some of ZPC’s multi-million dollar tenders include Munyati solar (awarded to ZTE Corporation), Insukamini in Bulawayo (17 Metallurgical China) and Mutare peaking power (Helcraw). Tenders were also awarded for the 300MW Kariba South extension, 600MW Hwange 7 and 8 extension (Sino Hydro), 30MW Gairezi hydro (Intratrek, BHL India, Angelique) and repowering of Bulawayo (17 Metallurgical), Munyati (Intratrek, Jaguar Overseas Limited) and Harare stations (Jaguar). Some of the companies, which initially lost the tenders, ended up involved in some projects. The deals were inflated by more than US$500 million amid reports of corruption and bribery.
Energy minister Samuel Undenge is under fire for paying convicted fraudster and dodgy businessman Wicknel Chivayo’s Intratrek US$5 million for the US$200 million Gwanda solar project without a bank guarantee, receiving about US$200 000 payment in suspected bribes and hiring an external PR company at Zesa even if there is an internal PR department.
Mphoko and his son were not available for comment.