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Overview

CDB pledges loan for production and purchase of seed cotton

Commitments (Constant USD, 2023)$568,248,574
Commitment Year•2011Country of Activity•ZimbabweDirect Recipient Country of Incorporation•UnknownSector•Agriculture, Forestry, FishingFlow Type•Loan

Status

Project lifecycle

Pipeline: Pledge

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Mar 1, 2011

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownershipAt least 25% Chinese ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • Unspecified Joint Venture between Sinotex and Cotton Company of Zimbabwe

Implementing agencies

Private Sector

  • Cotton Company of Zimbabwe Limited
  • Sinotex United Import And Export Corp., Ltd.

Loan desecription

CDB pledges loan for production and purchase of seed cotton

Interest type•Unknown

Narrative

Full Description

Project narrative

In March 2011, Sinotex Investment & Development Co. (中纺联 or Sinotex), the Cotton Company of Zimbabwe (与津巴布韦棉花公司 or 中非棉业津巴布韦有限公司 or 公司正与津巴布韦棉花公司 or Cottco) and China Development Bank (CDB) signed an MOU, which outlined the terms of a $500 million financing arrangement for the production and purchase of seed cotton. Under the terms of the MOU, Sinotex Investment & Development Co. and the Cotton Company of Zimbabwe were expected to establish a joint venture, and CDB would then issue one or more loans to the joint venture. With CDB financing, Sinotex and the Cotton Company of Zimbabwe hoped to increase an out-grower scheme by 100,000 new farmers, and expand technical and input support to the growers; however, it does not appear that this CDB loan ever materialized, and Sinotex shut down its operations in Zimbabwe in 2016.

Staff comments

1. At the time that the MOU was signed, Cotton Company of Zimbabwe was the largest cotton buyer in the country and had an out-grower scheme supporting more than 200,000 farmers. 2. According to media reports, in 2011, CDB also provided a $10 million loan as a pre-shipment finance for the sale of lint by Cottco to Sinotex. This potential loan commitment requires further investigation.