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

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.

Additional details

1. This project is also known as the Agriculture-Mechanisation Equipment and Implements Project 1. The Chinese project tittle is 津巴布韦农业机械供货一期项目 or 农机和小型农产品加工成套项目. 2. China Eximbank also provided a loan for Phase 2 of the Agricultural Machinery, Equipment, and Implementation Project (captured via Project ID#61258). 3. ZFDC is referred to as Zimbabwe Farmers' Development Trust by some sources. 4. In the database of Chinese loan commitments that it released in July 2020, SAIS-CARI does not identify the maturity length of this loan. AidData records the maturity length (10 year maturity) that is reported by Zimbabwe’s Ministry of Finance and Economic Development in its Blue Book Estimates of Revenue and Expenditure.

Number of official sources

10

Number of total sources

14