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

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.

Additional details

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 Project 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%).

Number of official sources

18

Number of total sources

29