China Eximbank provides RMB 1.025 billion government concessional loan for Victoria Falls Airport Renovation and Expansion Project

On April 5, 2012, China Eximbank signed an RMB 1,025,000,000 ($149.9 million) government concessional loan (GCL) agreement with the Government of Zimbabwe for the Victoria Falls Airport Renovation and Expansion Project. The GCL carried the following borrowing terms: a 20 year maturity (final maturity date: 2032), a 5 year grace period, a 2% interest rate, a 0.5% management fee, and a 0.5% commitment fee. To facilitate loan repayment, the GCL agreement specifies that the borrower must deposit the proceeds from the revenue generated by Victoria Falls Airport and the passenger service charges generated from Harare Airport in an escrow account held by China Eximbank. This project involved an extension of an existing runway, the construction of a second 4,000 meter long runway, the construction of a 20,000 square meter new terminal, and the construction of a parking lot. Upon completion, it was expected that Victoria Falls International Airport would be able to handle 1.2 million passengers a year and accommodate wide-bodied aircrafts such as 747s. China Jiangsu International was the contractor responsible for implementation, and its work was overseen by the Civil Aviation Authority of Zimbabwe. On April 12, 2013, construction began. The project was originally expected to take 30 months to complete (October 12, 2015). The project was completed and officially handed over to the Zimbabwean authorities on November 18, 2016. However, there are signs that the China Eximbank loan contracted by the Government of Zimbabwe for the Victoria Falls Airport Renovation and Expansion Project has underperformed financially. As of 2018, the borrower had accumulated principal and interest arrears and penalties worth $12,715,177.30. 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 $170,187,609.58 as of September 2021.

Additional details

1. The Chinese project title is 维多利亚瀑布市机场改扩建 or 的维多利亚瀑布机场扩建项目. 2. Some sources characterize the face value of the China Eximbank loan as $162 million. AidData relies on the RMB 1,025,000,000 face value that is recorded by Zimbabwe’s Ministry of Finance and Economic Development in its 2019 Blue Book Estimates of Revenue and Expenditure. AidData records the maturity length this is reported in the 2019 Blue Book Estimates of Revenue and Expenditure and the grace period that was presented to Zimbabwe’s Parliament prior to loan ratification. In the database of Chinese loan commitments that it released in July 2020, SAIS-CARI does not identify the maturity length or grace period of this loan. 3. Other agreements signed between 5-6 April, 2012 included a 31.5 million RMB agreement for provision of an outside broadcasting van for the Zimbabwe Broadcasting Corporation (see Project ID#30639), an ETCA worth RMB 80 million (see Project ID#30260), and a grant worth 4.5 million RMB for neonatal equipment (see Project ID#30638).

Number of official sources

11

Number of total sources

25