China Eximbank provides a $970,000 USD loan to Farmers' World for the acquisition of farming equipment (Linked to Record ID#72966)

Project narrative

In March 2010, the Export-Import Bank of China signed a $970,000 loan agreement with Farmers’ World — a company in Zimbabwe — for the acquisition of farming equipment. The Government of Zimbabwe issued a sovereign guarantee for this loan, making it a contingent liability of the Government of Zimbabwe. Farmers’ World subsequently defaulted on its outstanding payment obligations to China Eximbank. In 2014, the Government of Zimbabwe agreed to repay $1,142,407 USD, which included interest from the $970,000 USD loan, of Farmers World’s outstanding obligations to China Eximbank. China Eximbank also provided a $60 million USD loan to Farmers' World in 2007, which was guaranteed by the Government of Zimbabwe and became debt of the Government of Zimbabwe when Farmers' World defaulted (see linked Record ID#72966). In June 2017, the Auditor General of Zimbabwe presented a report to the Public Accounts Committee of the National Assembly, noting that “[l]oan agreements and other supporting documents pertaining to the [China Eximbank] and Farmers’ World loan facility were not availed for audit examination. … In the absence of contractual documentation, there is risk that Government [of Zimbabwe] may fail to recover the loaned amounts thereby prejudicing public funds. It was said the loans were paid on behalf of beneficiaries of agricultural machinery, equipment and implements. The Accountant General advised the Committee that the… payment to [China Eximbank] was important for Government [of Zimbabwe] to retain the country’s credit worthiness with [China Eximbank] and ensure continued lines of credit. As part of efforts to recover the funds from Farmers’ World, the matter had been referred to Attorney General Office for guidance. Then, on February 7, 2017, the Minister of Finance and Economic Development told Zimbabwe’s Parliament that “When it became clear that we would not be able to access additional Chinese funding, we paid off this loan and thus Farmers’ World became our debtor". As China Eximbank debt was repaid, this project was completed.