China Eximbank provides RMB 200 million government concessional loan for Phase 1 of Agricultural Machinery, Equipment, and Implementation Project (Linked to Record ID#61258)

Project narrative

On October 30, 2006, China Eximbank signed an RMB 200 million ($29.2 million) government concessional loan (GCL) agreement with the Government of Zimbabwe for Phase 1 of the Agricultural Machinery, Equipment, and Implementation Project. The first phase was launched in 2006 with 25 million worth of implements being delivered to the country. The GCL had a 10 year maturity (final maturity date: 2015); however, its interest rate and grace period are unknown. China Eximbank allowed the Government of Zimbabwe — in partnership with the Zimbabwe Farmers Development Company (ZFDC) — to repay this loan with the proceeds from tobacco sales. The Government of Zimbabwe reportedly agreed to sell 30,000,000 kilograms of tobacco to China for four straight years, followed by an increase to 80,000,000 kilograms in the fifth year. This project supported ZFDC’s acquisition of agricultural machinery — including 357 tractors, 65 dumper trucks, 50 thirty-tonne truck horses, 50 twenty tonne trailers, 8 bulldozers, and 86 water pumps — from China Yituo International Trade Co., Ltd. The intended beneficiaries of the equipment (local farmers) were expected to cover 20% of the cost of the farming equipment they received. China CAMC Engineering Co Ltd. was the contractor responsible for implementation The project was officially completed and handed over to the Zimbabwean authorities on April 21, 2007. Chairman, Jia Qinglin, of the CPPCC National Committee and Zimbabwe's President Robert Mugabe, attended the handover ceremony. However, there is some evidence that the loan supporting Phase 1 underperformed vis-a-vis the creditor’s original expectations. As of 2018, the borrower had accumulated principal and interest arrears and penalties worth $4,159,176.96.