(ZIMBABWE GUARDIAN) Zimbabwe, Iran in mega energy deals

Zimbabwe, Iran in mega energy deals
By: TSM-TZG
Posted: Sunday, April 25, 2010 11:28 pm

ZIMBABWE and Iran have signed an agreement under which the two countries intend to jointly run three key energy projects worth millions of United States dollars.

The two countries are also looking forward to signing a pact that will increase trade between them. However, Zimbabwe still has to consult the Common Market for Eastern and Southern Africa (Comesa) before the agreement can be signed.

In an interview, the Minister of Industry and Commerce, Professor Welshman Ncube, said the Feruka Oil Refinery, the Lupane Methane Gas Project and Chisumbanje Ethanol Plant are the ventures earmarked for investment.

He said Government forwarded them for consideration after last Thursday’s signing of an agreement operationalising the proposed joint investment company between the Southern African country and its Middle East counterpart.

The company — comprising the Industrial Development Corporation and its Iranian equivalent — is a vehicle mandated to identify investment projects in Zimbabwe.

Prof Ncube said if ultimately approved, the Iranians would fund the three projects identified so far.

“The projects are not written in the agreement, but we want to put them under the auspices of the joint investment company,” he said.

“Of course, the Iranians would, for instance, in the gas project, provide funding while we provide the gas.”

The minister said the trade agreement would be signed after consulting Comesa in line with standing requirements.

He said Zimbabwe was 'Looking East' for its economic recovery, adding that plans to engage other countries in the Middle East were on course.

“We obviously start consulting Comesa immediately. We propose to increase and enhance trade with Iran and that underpins economic co-operation between the two countries,” he said.

“Our economy has been depressed and the traditional (trading) partners in the West are reluctant (to co-operate) and have in fact imposed sanctions. In such a case, one has to seek alternatives.

“It is important to note that Comesa is also increasing partnership with the Middle East, which is least affected by the global economic crunch.

“That’s where the money is. The West is also going there. The idea is that we should not be beholden to Europe as our trading partners but also look elsewhere.”

Last week Iranian President Mahmoud Ahmadinejad visited the country to open the Zimbabwe International Trade Fair (ZITF) and to oversee the signing of nine substantive agreements.

Among the pacts were those pertaining to science and technology; tourism; education; aviation services; culture; youth and the economy.

The Iranian leader’s visit and the agreements have been seen as underlining the deepening bilateral relations between Iran and Zimbabwe.

Harare and Teheran are expected to arrange exchange programmes for their lecturers and students under the auspices of the education agreement.

Their aircraft would also be free to fly into each other’s airspace, courtesy of the air services pact. The agreement is expected to increase air traffic and business volumes between the two countries.

President Ahmadinejad told journalists after the signing ceremony at State House that the close ties between Iran and Zimbabwe should be reflected in their level of co-operation. He said the agreements broadened this co-operation and gave greater impetus to development.

He added that his country would continue to stand by Zimbabwe.

Speaking afterwards at a State banquet held in honour of his counterpart, President Mugabe said the two countries should intensify co-operation to guard against destabilisation.

He said Zimbabwe offers viable investment opportunities, adding that the country relied on the support of its allies.

“Inflation has been reduced to single-digit levels, while basic commodities are now more readily available on the local market,” he said.

“Capacity utilisation in our industries has also increased from about 10 percent a year ago to about 50 percent now.

“The business environment has also improved in tandem with the improvement in the macro-economic situation in the country.

“Zimbabwe is therefore poised for real economic growth and offers attractive opportunities for investment in the mining, manufacturing, tourism, agro-processing and services sectors.”