Export-Import Banks Of China, India Syndicate $108m For Zimbabwe Power Projects
The Export-Import Bank of China and Export-Import Bank of India Zimbabwe have syndicated three separate loans of just over US$108.3 million for Zimbabwe to use for power generation projects and broadband expansion.
The Herald reported yesterday that the Zimbabwean government tied a loan agreement with the Export-Import Bank of China of ¥465 050 000 (US$65 852 350) on June 26, while the Exim-Import Bank of India released two loans of US$23 million and US$19,5 million.
Quoting an extraordinary government gazette published last Friday, the report said the Minister of Finance and Economic Development, Professor Mthuli Ncube concluded the loan agreements on behalf of Zimbabwe on April 4, 2019.
The Chinese loan has a 20-year tenure at an interest rate of 2% per annum and a management fee of 0.25% on the outstanding principal amount. “The loan will be utilised for the purpose of expanding the Zimbabwe NetOne National Mobile Broadband Expansion Project,” said government. A copy of the loan agreement will be available for inspection at the Ministry of Finance and Economic Development offices in Harare.
The Export-Import Bank of India provided a US$23 million line of credit, which also has a tenure of 20 years, with a grace period of five years at an interest rate of 1.75% per annum. It also has a commitment fee at the rate of 0.5% on outstanding principal amount. A management fee shall be payable once off at the rate 0.5%.
Government further said the loan will be utilised for “financing renovation and upgrading of the Bulawayo Thermal Power Plant”. Also, the Export-Import Bank of India released a US$19.5 million, which will be used to finance Phase II of Deka Pumping Station and River Intake System.
The loan is for 20 years with a grace period of five years. It has an interest rate of 1.75% per annum, and a commitment fee at a rate of 0.5% on the outstanding principal amount. A management fee shall be payable once off at the rate of 0.5%, the reports said.
The Indian loans are expected to improve the country’s power situation which is presently precarious, although government has been running around to normalise the situation. Declining water levels in Lake Kariba are said to have plunged most parts of the country into darkness for longer periods per day.
There are fears that if the water levels continue to decline in Lake Kariba, power generation could stop by early October, which will almost complicate the situation. Last Friday, Kariba Hydropower Station was generating 164MW, against an installed capacity of 1 050MW.
Hwange Thermal Power Station was producing 469MW, and Harare and Munyati 15MW each. This means the country was generating 663MW against a national demand of 1 700MW.