China Eximbank restructures $12.1 million for Sino-Zimbabwe Cement Plant Project via maturity extension and interest rate reduction (Linked to Record ID#66956)

Project narrative

In 1997, the Export-Import Bank of China provided a $12.1 million loan to the Government of Zimbabwe’s Industrial Development Commission (IDC) for the Sino-Zimbabwe Cement Plant Project (see Record ID#66956). This loan carried the following terms: a 13-year maturity, 8 year grace period, and 4% interest rate. IDC, in turn, used the proceeds of this loan to on-lend to 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. In October 2004, China Eximbank signed a debt restructuring agreement with the Ministry of Finance in Harare. This agreement reduced the interest rate from 4% to 2% and extended the maturity period from 13 years to 20 years. There are signs the loan underperformed even after the restructuring. According to IDCZ's 2019 annual report, "the tenure of this loan ended in 2017 but the loan was not paid."