CATIC provides $6.1 million supplier credit for Phase 1 of the Rural Electrification Equipment Acquisition Project (linked to #17158)

On June 28, 2003, China National Aero-Technology Import and Export Corporation (CATIC,中国航空技术进出口总公司) and the Government of Zimbabwe signed a $6,140,140 supplier credit agreement for the Phase 1 of the Rural Electrification Equipment Acquisition Project. The proceeds from this agreement were used to partially finance an $11 million contract between the Zimbabwe Electricity Supply Authority (ZESA) and CATIC for the acquisition of rural electrification equipment, including transformers, switchgears, circuit breakers and meters. CATIC allowed its borrower to repay the loan by depositing the foreign currency proceeds from tobacco sales into an escrow account. Phase 1 was officially completed and handed over to the ZESA authorities on November 2, 2004. The Chinese project title is 第一期农村电网项目 or 的农村电网改造 or 津农村电网改造工程. CATIC also provided a $27,015,002 supplier credit in 2005 for Phase 2 of the Rural Electrification Equipment Acquisition Project. CATIC again allowed its borrower to repay the loan by depositing the foreign currency proceeds from tobacco sales into an escrow account. However, Phase 2 of the project reportedly ran into problems during implementation because of foreign exchange shortages. Phase 2 was officially completed and handed over to the ZESA authorities on March 6, 2006. The linked project #17158 captures the CATIC supplier credit for Phase 2 of the project.

Additional details

The Chinese project title is 第一期农村电网项目 or 的农村电网改造 or 津农村电网改造工程 (See: 吴邦国出席津电力公司进口中国设备移交仪式). Several sources refer to a “$40 million” supplier credit, but these references may refer to the aggregate value of both CATC supplier credits for Phase 1 and Phase 2 of the Rural Electrification Equipment Acquisition Project. ZESA used an entity called the Rural Electrification Fund (REF) to facilitate the purchase of equipment rom CATIC.

Number of official sources

11

Number of total sources

22