Project ID: 22055

China Eximbank provides $140.8 million buyer’s credit loan for Rehabilitation of Municipal Water and Sewage Treatment Works Project (Linked to Project ID#63444)

Commitment amount

$ 173198755.13918933

Adjusted commitment amount

$ 173198755.14

Constant 2021 USD


Funding agency [Type]

Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]




Water supply and sanitation (Code: 140)

Flow type


Level of public liability

Central government debt

Financial distress






Mixed (The next section lists the possible statuses.)





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


Implementation (The next section lists the possible statuses.)










Planned start


Actual start


Planned complete


NOTE: Red circles denote delays between planned and actual dates


On March 21, 2011, the Government of Zimbabwe and China Eximbank signed a $141.3 million buyer’s credit loan (BCL) agreement for Rehabilitation of Municipal Water and Sewage Treatment Works Project. Zimbabwean Vice President Joyce Mujuru signed the loan agreement in Harare. The loan agreement followed the signing of a 2010 Memorandum of Understanding (MOU) by the Chinese Government and Government of Zimbabwe for the financing of various development projects. Officials from Zimbabwe’s Ministry of Finance, representatives from China Eximbank and Sinosure signed the MOU. Sinosure agreed to provide insurance cover for various loans issued by China Eximbank. The BCL that was issued on March 21, 2011 carried the following borrowing terms: an 11 year maturity, a 4 year grace period, an interest rate of 6-month LIBOR plus a 3% margin, a 0.375% management fee, and a 0.375% commitment fee. However, its face value was subsequently revised to $140,825,714.38. The purpose of this project was to support the development and rehabilitation of water works and sewers in the Zimbabwe’s capital, Harare. More specifically, the proceeds of the loan were to be used to rehabilitate, replace, install and commission equipment at the Morton Jaffray water treatment plant, the Prince Edward Water Treatment plant, the Crowborough sewage plant, the Firle sewage plant, and pump stations at Warren Control, Alex Park, and Letombo. Some of the loan proceeds were also earmarked for information technology and automated billing activities, the acquisition of water treatment chemicals, the installation of laboratory, the installation of pressure-reducing valves, and the installation of prepaid meters in 500,000 households. China National Machinery and Equipment Corporation (CNMEC) was the contractor responsible for implementation of the project. This project officially entered into force on January 26, 2013, but it was plagued by various delays and controversies. In 2013, China Eximbank reportedly withheld loan disbursements due to the Government of Zimbabwe’s failure to meet its outstanding obligation under a 1997 loan that it provided to Zimbabwe Iron and Steel Industries (See Project ID#17125). In September 2013, 19 Chinese engineers joined a larger 46 engineer team to work on the project. Then, in June 2014, the deadline for project completion was pushed forward from April 2016 to June 2015. As of June 2014, several areas previously not receiving water had access and obsolete equipment was removed from facilities, the Morton Jaffray water treatment plant was operating at 70 percent capacity, and two pressure-reducing valves were installed at Warren Park D and Ardbennie. A month later, in July 2014, an investigation was launched after the Harare City Council was accused of spending $8 million of the loan proceeds to purchase 25 luxury vehicles. Harare City Council insisted that the vehicles were for service deliveries; however, China Eximbank decided to withhold loan disbursements after learning that the loan proceeds were not being used for the intended purposes. As of June 2017, only half of the China Eximbank loan (approximately $72 million) had been disbursed. As of February 2020, China Eximbank was still withholding loan disbursements for this project. There is also evidence that the Government of Zimbabwe has fallen behind on its loan repayment schedule. As of 2018, the borrower had accumulated principal and interest arrears and penalties worth $28,430,361.10. Also, according to a report released by the Debt Management Office of Zimbabwe’s Ministry of Finance in mid-2022, the loan was still in arrears at the end of 2021. Total external debt arrears to China Eximbank at the end of 2021 included $13 million for the NetOne Expansion Phase 1 Project, $47 million for the NetOne Expansion Phase 2 Project, $67 million for the Rehabilitation of Municipal Water and Sewage Treatment Works Project (City of Harare Project), $7 million for the National Defence College Project, $54 million for the Victoria Falls Airport Renovation and Expansion Project, $3 million for the Robert G. Mugabe International Airport Expansion Project, $0.5 million for Phase 2 of the TelOne Broadband Expansion Project, and $73 million for the Medical Equipment and Supplies Project. The loan’s amount outstanding (including principal, interest, and arrears) was $80,640,308.76 as of September 2021.

Additional details

1. This project was financed as part of a larger $566 million umbrella agreement, which is captured via Project #63444. 2. At the time that the 2011 loan agreement for the Rehabilitation of Municipal Water and Sewage Treatment Works Project was presented to Zimbabwe’s Parliament for ratification, the maturity length of the loan was identified as 9 years, which implies that 2020 was final maturity date under the original loan agreement. However, in the 2019 Blue Book Estimates of Revenue and Expenditure published by Zimbabwe’s Ministry of Finance and Economic Development, the final maturity date of the loan is identified as 2022, which implies an 11 year maturity. The IMF also reports that this loan has an 11 year maturity. 3. This project is also known as the Harare City Water Reticulation Project and the City of Harare Project. The Chinese project title is 哈拉雷市政供水改造项目 or 津巴布韦水厂项目 or 的哈拉雷莫尔顿杰夫瑞自来水厂维修工程 or 的哈拉雷城市供水及污水处理系统改造项目. 4. AidData has estimated the all-in interest rate by adding 3% to average 6-month LIBOR in March 2011 (0.507%).

Number of official sources


Number of total sources


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Direct receiving agencies [Type]

Government of Zimbabwe [Government Agency]

Implementing agencies [Type]

China Machinery Engineering Corporation (CMEC) [State-owned Company]

Insurance provider [Type]

China Export & Credit Insurance Corporation (Sinosure) [State-owned Company]

Loan Details


11 years

Interest rate


Grace period

4 years

Grant element (OECD Grant-Equiv)


Bilateral loan

Export buyer's credit

Investment project loan