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Pinsent Masons acts on landmark US$1.4bn Zimbabwe investment

International law firm Pinsent Masons has advised on a $1.4bn deal to fund the construction of two expansion units with a total capacity of 670MW at the Hwange thermal power station complex in Zimbabwe.

The Hwange expansion project is a significant milestone in the rehabilitation of the infrastructure critical to increasing Zimbabwe's economic output, representing one of the largest foreign investments in the country in recent years.

Construction work will take a period of up to three years, and the finished plant will supply an additional 30 percent to the country's generation capacity - reducing the potential for power shortages and the need for imports of power from neighboring countries.  The project also involves a significant upgrade to the country's transmission network, works that are required to absorb such a significant increase in generation capacity

Pinsent Masons represented Sinohydro Corporation Limited, which will undertake construction of the power station and the transmission upgrades, in addition to taking a minority equity holding in the project.

Pinsent Masons supported Sinohydro through its China Outbound Belt & Road team led by Beijing-based partner Amanda Yao, together with John Yeap and David Platt, working in collaboration with our Johannesburg office.

Amanda Yao said:

"This is a significant project for Zimbabwe and the wider region and represents an evolving business model for many Chinese SOEs whereby their participation is no longer just about the construction, but also includes operations and equity ownership.  . Working across our offices in China and Africa, we were able to bring together our detailed understanding of Chinese investment priorities and on the ground familiarity with local regulatory and legal considerations"

The deal is the latest in a long line of 'Belt and Road' related projects undertaken by Pinsent Masons.  The Chinese government policy to support the develolpment of infrastructure along the old 'Silk Road' trading route has seen Pinsent Masons advise upon numerous transactions including: the US$1.5bn Thar II power project in Pakistan (one of the very first Belt and Road projects); the US$2.1bn Attarat shale and power project in Jordan, a US$1.5bn investment in the Colombo Port project in Sri Lanka; and a US$1.5bn investment into the Mombasa-Nairobi Railway - Kenya’s biggest infrastructure investment since independence.

Independent research recently indicated that the firm has conducted more Belt and Road transactions than any other law firm, and the only law firm to have been involved in all three of the non or limited recourse Belt & Road project finance transactions to have financially closed.

Further details of Pinsent Masons' OBOR capability can be found here.

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