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Overview

China Eximbank provides $89.9 million buyer’s credit loan for Medical Equipment and Supplies Project (Linked to Record ID#63444)

Commitments (Constant USD, 2023)$102,233,601
Commitment Year•2011Country of Activity•ZimbabweDirect Recipient Country of Incorporation•ZimbabweSector•HealthFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Mar 21, 2011
Start (planned)
Mar 21, 2011
End (actual)
Mar 5, 2015
First repayment
Mar 20, 2015
Last repayment
Mar 18, 2022

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 ownership

Funding agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Government Agencies

  • Government of Zimbabwe

Implementing agencies

State-owned companies

  • China Machinery Engineering Corporation (CMEC)

Insurance providers

State-owned companies

  • China Export & Credit Insurance Corporation (Sinosure)

Loan desecription

China Eximbank provides $89.9 million buyer’s credit loan for Medical Equipment and Supplies Project

Grace period•4 yearsGrant element•32.2963%Interest rate (t₀)•3.46%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•11 years

Narrative

Full Description

Project narrative

On March 21, 2011, China Eximbank and the Government of Zimbabwe signed a $89,955,000 buyer’s credit loan (BCL) agreement for the Medical Equipment and Supplies Project. This loan carries the following borrowing terms: an 11 year maturity (final maturity date: 2022), 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. It is backed by a Sinosure credit insurance policy. This project involved the acquisition of NMR, CT, digital X-ray machines, ultrasound machines, anesthesia machines, incubators, medical carts, ambulances, and mobile clinic buses. China Machinery Engineering Corporation (CMEC) was the contractor responsible for implementation of the project. The equipment was officially commissioned and handed over to the authorities at the Harare Central Hospital on March 5, 2015. However, there are signs that the China Eximbank loan contracted by the Government of Zimbabwe for the Medical Equipment and Supplies Project has underperformed financially. As of 2018, the borrower had accumulated principal and interest arrears and penalties worth $31,729,633.19. 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. By the end of 2021, total external debt arrears to China Eximbank 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 $87,383,270.54 as of September 2021.

Staff comments

1. This project is also known as the Sinosure Medical Equipment Project. The Chinese project title is 津巴布韦医疗设备供货项目 or 医疗设备. 2. This project was financed as part of larger $566 million umbrella agreement, which is captured via Record ID#63444. 3. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies this project as being supported by a concessional loan with a 20 year maturity, 5 year grace period, and 2% interest rate. AidData records the lending terms that reported by the IMF and by Zimbabwe’s Ministry of Finance and Economic Development (in its communications with the National Assembly prior to loan ratification). 4. AidData has estimated the all-in interest rate by adding 3% to average 6-month LIBOR in March 2011 (0.461%). 5. One official source (https://www.veritaszim.net/sites/veritas_d/files/gn%203053-3068.pdf) suggests that the loan's original maturity may have been 9 years rather than 11 years. This issue warrants further investigation, including the possibility of a 2-year maturity extension.