Project ID: 17125

China Eximbank reschedules outstanding debt obligations of Ziscosteel via maturity extension and interest rate reduction (linked to #20963, #63471, #72785)

Summary

Funding agency [Type]

Export-Import Bank of China [State-owned Policy Bank]

Recipient

Zimbabwe

Sector

Action relating to debt (Code: 600)

Flow type

Debt rescheduling

Concessional

Vague

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2003

2003-09-11

Planned implementation start

Geography

Description

On September 11, 2003, the Export-Import Bank of China signed a debt rescheduling agreement with Zimbabwean state-owned steel company Zimbabwe Iron and Steel Company (ZISCO or Ziscosteel). The agreement rescheduled $42 million of Ziscosteel’s outstanding obligations under a buyer’s credit loan that it originally contracted in 1997 for the Blast Furnace No.4 Project (see project #63471) (See: Debt Relief with Chinese Characteristics). The agreement came after Ziscosteel defaulted on the loan in question. China Eximbank agreed to reduce the interest rate of the loan from 7% to 4% and extend the maturity of the loan by 3 additional years (See: Debt Relief with Chinese Characteristics). These changes reportedly allowed for Ziscosteel to make a reduced annual debt service payment of $8 million.The officials involved in the process of negotiating and formalizing the debt rescheduling deal were the Zimbabwean Ambassador to China, Chris Mutsvangwa; Zimbabwe's Minister of Industry and International Trade, Samuel Mumbengegwi; Permanent Secretary in Zimbabwe’s Ministry of Finance and Economic Development, Nicholas Ncube; and the Director General of the African Department in the Minister of Foreign Affairs of China, Du Qiwen.Multiple reports from Zimbabwean newspaper outlets in November 2003 indicated that the debt rescheduling agreement would be finalized in December 2003 with China Eximbank. This agreement also reportedly reopened Chinese credit lines to Zimbabwe, which were severed after Ziscosteel defaulted on the original loan. This loan was rescheduled again in 2007 and 2010 (See: Debt Relief with Chinese Characteristics). The 2007 rescheduling is captured in the linked project #72785, and the 2010 rescheduling is captured in the linked project #20963. The original 1997 loan is captured in project #63471.

Number of official sources

1

Number of unofficial sources

5

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Details

Cofinanced

No

Receiving agencies [Type]

Zimbabwe Iron and Steel Company (ZISCO) [Joint Venture/Special Purpose Vehicle]

Loan type

Some Information

Interest rate

4.0%

Gurarantee provided

No

Insurance provided

No