China Eximbank provides $200 million buyer’s credit loan for Agricultural Supply Project (linked to #72771)

On 14 September, 2006, China Eximbank and the Government of Zimbabwe signed a $200 million buyer's credit loan (BCL) for an Agricultural Supply Project (See: Zimbabwe to Import Fertiliser from China). The purpose of this project was to purchase inputs the country’s agriculture sector — including 387,000 tons of fertilizers, pesticides, agricultural tools and equipment, and irrigation equipment — that the Government of Zimbabwe was unable to purchase due to foreign currency shortages (See: Zimbabwe to Import Fertiliser from China). The BCL carries the following terms: an 11 year maturity and a 5 year grace period. The Chinese project title is ２亿美元买方信贷从中国进口化肥、农药、兽药、农机具和灌溉设备.China Eximbank allowed the Government of Zimbabwe to repay the loan with the proceeds from platinum mining revenues (See: Eastern Promises: New Data On Chinese Loans in Africa, 2000 to 2014). It also collateralized the loan with a platinum mining concession involving the Zimbabwe Mining Development Corporation and a Chinese company called Wanbao Mining in a 110 square kilometer area known as the Selous and Northfields Reserves (See: Storm Brews Over China Deal).The first shipment of fertilizer (specifically Compound Types D, S, C, and L) from China was expected to arrive in Zimbabwe at the beginning of October 2006 to help farmers deal with crop shortages; however, it did not arrive in Zimbabwe until 26 December, 2006 (See: Zimbabwe: First Fertilizer Consignment Arrives). On December 21, the first batch of fertilizers arrived in Harare. This consignment was 22,000 tons of compound D fertilizers (See: Part of Zimbabwe's fertilizer imported from China was officially delivered for use). As of December 22, another 3.5 tons of urea exported from China to Zimbabwe arrived in Maputo, Mozambique, and 32,000 liters of dimethoate insecticide imported from China was being distributed into small bags to farmers for use. On the 25th, other agricultural chemicals exported from China were expected to also arrive in the Port of Durban, South Africa (See: Part of Zimbabwe's fertilizer imported from China was officially delivered for use).On 1 February, 2007, Samuel Muvuti, acting chief executive of the state-owned Zimbabwe Grain Marketing Board, announced that a second shipment of 13,000 tonnes of fertilizer procured through the $200 million loan was delivered to Zimbabwe via Mozambique from China- with 8,000 tonnes still in transit and 14,000 tonnes awaiting transportation at port in Mozambique with the goal of delivering the fertilizer from the port by mid-February 2007 (See: 13 000 Tonnes of Fertilizer Delivered).A consignment of 1,000 more tractors and an assortment of other related farming implements worth $100 million was expected to arrive from China later in 2007 (See: 1000 More Tractors Expected From China). These agricultural implements included harvesters, irrigation pumps, disc harrows, planters, and electricity generators. The implements were ultimately shipped from China to Zimbabwe in November 2011. It appears that the Government of Zimbabwe may have also purchased 97 trucks with the proceeds from the China Eximbank loan.By July 2012, the Government of Zimbabwe had fallen into arrears and China Eximbank agreed to extend the grace period of the loan from 5 years to 8 years (See: Zimbabwe, China strengthen economic cooperation). This debt rescheduling agreement is captured in the linked project #72771.

Additional details

In the database of Chinese loan commitments that it released in July 2020, SAIS-CARI does not identify the borrowing terms for this loan. AidData records the borrowing terms (11 year maturity and 5 year grace period) that were reported by China’s Ministry of Commerce and Zimbabwe’s Ministry of Finance and Economic Development (in its Blue Book Estimates of Revenue and Expenditure).

Number of official sources

7

Number of unofficial sources

27