What’s the latest on Chinese loans?
According to a recent report by Finance Minister Mthuli Ncube to Parliament, Zimbabwe has borrowed US$2.7 billion from China since 1980. The outstanding debt to China as at August 2022 amounted to US$1.768 billion, he said.
Most of the Chinese loans have been borrowed for infrastructure projects.
On current loans, Zimbabwe borrowed US$998 million from the China Export-Import Bank for the Hwange 7 & 8 power units. Last year, the bank released US$24 million for the project. But the report by the mid-term Debt Management Office shows that, again, Zimbabwe is struggling to service some of the running Chinese loans.
According to the report, China is not releasing as much of the loans as needed because Zimbabwe is in arrears on loans for the Victoria Falls Airport (US$65.36 million), NetOne Network Expansion Phase I & II (US$66.65 million) and TelOne National Broadband Expansion Project (US$8.0 million).
Says Treasury: “Government is currently working with the Entities in default to ringfence resources for the clearance of these outstanding arrears.”
How much did we get from loans last year?
In total, in 2021, Zimbabwe received US$35.9 million from the running loan agreements.
Apart from the Hwange power station loans, Zimbabwe also got US$3.9 million from the US$28.6 million loan from the India Exim Bank for the Deka Pumping Station. This is a project to bring water from the Zambezi to the new Hwange power units.
Zimbabwe also got US$8 million from the Opec Fund for International Development (OFID). The money is being used for social projects as well as to rehabilitate irrigation schemes around the country.
From 2022 to 2025, Zimbabwe expects to receive loan disbursements of US$556.4 million. This includes US$293 million for the Hwange 7 and 8 power plants, US$20 million for the Deka Pumping Station, US$71 million for the R.G. Mugabe International Airport, NetOne Network Expansion Phase III (US$43 million) and the Bulawayo Thermal Power Station (US$82 million).- NewZWire
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