China Development Bank provides $93 million loan to Econet Wireless Zimbabwe for telecommunication network expansion and refinancing purposes

Project narrative

On June 20, 2014, China Development Bank signed a $93 million loan agreement with Econet Wireless Zimbabwe (Zimbabwe's largest provider of telecommunications services) for telecommunication network expansion and refinancing purposes. This loan carried an effective interest rate of 5.7%, and it was guaranteed by Econet Global Limited (EGL). The originally scheduled final repayment (maturity) date was August 21, 2019, making the estimated maturity of the loan 5.166 years. The loan was collateralized against a minimum cash balance in a debt service reserve account (DSRA). There are some indications that the $93 million CDB has financial underperformed vis-a-vis the original expectation of the lender. In 2017, as a result of the a shortage of foreign currency in the overseas nostro accounts of Zimbabwe’s banks, repayments to CDB worth $12.4 million were funded from the DSRA (given that foreign currency could not be availed within the repayment deadlines. CDB was advised in advance of the DSRA utilization and provided with a 'remediation plan'. As of February 28, 2017, the borrower had made repayments to the lender worth $21,455,000 and the loan's (principal) amount outstanding was $71,219,000. By February 28, 2017, the borrower had fully repaid the loan.