SA bank restructures US$200m Zinara loan

Zimbabwe got a reprieve after the Development Bank of Southern Africa (DBSA) agreed to restructure the US$206 million loan that the Zimbabwe National Road Administration got to refurbish the Plumtree-Mutare Highway in 2011, a Cabinet Minister has said.

DBSA has restructured the loan whose full liquidation was due to be completed this year, but will now run for another 15 years with more favourable interest rates after the South African-based financial institution engaged Zinara and the country’s fiscal and monetary authorities.

Transport and Infrastructural Development Minister Felix Mhona said the restructuring will pave way for the Government to access new loan facilities for infrastructure after it had been placed in the red zone after Zinara struggled to repay.

Minister Mhona said this during a Star FM current affairs radio programme aired earlier this week.

“After noting that the loan was not performing, we are looking at US$206 million loan facility that was extended and it failed to perform. Continuous engagement was then enhanced. With this new (Zinara) board and the executive they have finally managed to engage DBSA to then sit and renegotiate on the terms of the loan. In April they managed to have a new term sheet in terms of the facility and it has been restructured.

Minister Mhona

“I am happy to say, in terms of the time frame we have been given a 15-year tenure to perform and with very reasonable interest rates. They have been reduced from 6,18 to 5 percent,” said Minister Mhona.

“Not only that they used to be a sinking fund where they would put as a hedging security against the fund which is no longer there. They now have to deposit directly to the loan account. The DBSA team was in the country from 10 to 15 May and managed to see a number of stakeholders including the Ministry of Transport, Reserve Bank of Zimbabwe, Ministry of Finance and Economic Development, sharing their perspectives and they are happy about the restructuring and by end of July, latest a signed off position will be there for a new facility. The new facility mean that we are now in a position to approach the bank for new funding through the Ministry of Finance.”

Zinara has been struggling to repay the loan and one of the reasons was occasioned by the changes in monetary policies that saw the Zimbabwean dollar being rated against the US dollar.

Turning to the challenges related to vehicle number plates, Minister Mhona said Zinara has chipped in with funding to import as part of efforts to end the problem as most motorists were taking ages to take delivery of the plates from the Central Vehicle Registry.

“We witnessed a shortage in the past month or so, as I sit here Zinara has availed funding so that we procure number plates. Why Zinara, it is because they are also an interested party, so that they procure number plates that are enough.

“But that is not the solution, we have to manufacture our plates locally. I am glad that our institutions of higher learning have done a noble project in trying to come up with a product,” said Minister Mhona.-herald.cl.zw