State owned mobile telecommunications operator, NetOne is one of the companies that benefitted from the nine deals that were signed when President Robert Mugabe visited China three weeks ago.
Finer details of the deals have remained elusive, but are now going public as they come before Parliament for approval.
NetOne, which was the first to get a mobile license in 1996 but has been overtaken in terms of its subscribers, by its peers Telecel Zimbabwe and Econet, signed a loan deal worth $218.954 million with the Chinese Export and Import Bank during Mugabe’s state visit last month.
The loan is for the expansion of its network as well as implementation of what is referred to in the agreement as the “Zimbabwe National Mobile Broadband Project.”
According to the 41-page loan agreement, which will be the first of the deals to go through Parliamentary scrutiny, NetOne will repay the loan over a period of 20 years, with a grace period of five years.
“The rate of interest applicable to the loan shall be two percent per annum,” reads the agreement.
“The rate applicable to the management fee shall be 0.25 percent. The rate applicable to the commitment fee shall be 0.25 percent per annum.”
The loan will fund the state mobile operator’s acquisition of broadband equipment, which in terms of the agreement is to be supplied primarily by Chinese firm, Huawei Technologies.
For some of the supplies, the agreement stipulates that “the goods, technologies and services purchased by using the proceeds of this facility shall be purchased from China preferentially.”
The Zimbabwean government has to pay 3.4 million yuan (about $553 000 ) in management fees to unlock the agreement within a month of having agreed to the deal, which is dated August 25, 2014.
“Any dispute arising out of or in connection with agreement shall be resolved through friendly consultation,” reads the agreement.
“If no settlement is reached through such consultation, each party shall have the right to submit such dispute to the International Court of Arbitration of the International Chamber of Commerce for arbitration.”
“The arbitral award shall be final and binding upon both parties. The arbitration shall take place in Paris.”
The deal is guaranteed by Zimbabwe’s government, which takes over the responsibility of paying back the loan in the event that Net One defaults.
Finance Minister Minster Patrick Chinamasa and president of the Export and Import Bank of China, Li Ruogu signed the agreement.- The Source