Narrative
Full Description
Project narrative
On January 19, 2000, China Eximbank provided an RMB 48,200,000 loan to the Government of Zimbabwe’s Industrial Development Commission (IDC) for Sino-Zimbabwe Cement Plant Expansion Project (as captured via Record ID#63472). The loan carried the following borrowing terms: a 15-year maturity, 5-year grace period, and 3% interest rate. IDC, in turn, used the proceeds of the loan to on-lend to the Sino-Zimbabwe Cement Company, which is a joint venture of China Building Material Industrial Corporation for Foreign Economic and Technical Cooperation (a Chinese state-owned company) and IDC. IDC holds a 35% equity stake and China Building Material Industrial Corporation for Foreign Economic and Technical Cooperation holds a 65% equity stake in the Sino-Zimbabwe Cement Company (see Record ID#66958). The purpose of the project was to support an expansion of the Sino-Zimbabwe Cement Plant, which was originally constructed with support from a separate $12.1 million China Eximbank loan that was contracted in 1997 (as captured via Record ID#66956). The project was completed in January 2001. However, the cement plant had difficulty generating enough revenue to repay the 2000 China Eximbank loan. In October 2004, China Eximbank signed a debt restructuring agreement with Zimbabwe's Ministry of Finance in Harare. The agreement reduced the RMB 48,200,000 loan’s interest rate from 3% to 2% and extended its maturity period from 15 years to 20 years. The October 2004 loan restructuring is captured via Record ID#63466.
Staff comments
1. The Sino-Zimbabwe Cement Plant Expansion Project is also known as the Huajin Cement Plant Expansion Project. 2. The joint-venture formation of the Sino-Zimbabwe Cement Company, as well as the funding it has received for Sino-Zimbabwe Cement Plant Expansion Project is captured via Record ID#66958.