HARARE, March 4 (Reuters) – The African Import and Export Bank (Afreximbank) has agreed to help Zimbabwe raise funds to refinance $ 1.4 billion in loans to the Pan-African lender, a report showed on Thursday. copy of the agreement viewed by Reuters.
The deal will give the country some breathing space on loan repayments to Afreximbank, which has become one of Zimbabwe’s biggest lenders after being kicked out of international financial institutions two decades ago for failing to repay debts .
Between December 2017 and December 2019, Zimbabwe, short of foreign exchange, concluded, through its central bank, three loan agreements with Afreximbank in the amount of $ 1.4 billion and using gold and platinum as collateral.
The loan refinancing agreement, dated December 2020, was signed by central bank government John Mangudya on behalf of Zimbabwe and Ibrahim Sagna, head of Afreximbank’s advisory and capital markets.
“Afreximbank will do everything to help increase the debt, as outlined in this mandate letter. For the sake of clarity, Afreximbank will identify and approach financial institutions and potential investors who would potentially be willing to provide funding to the Reserve Bank of Zimbabwe and source letters of intent from interested lenders / investors, ”the report said. agreement.
Mangudya did not answer his phone when called by Reuters, or respond to a message seeking comment. Afreximbank did not immediately respond to questions sent by email.
Afreximbank will act as sole advisor and will remain a creditor. The original loans had terms of three to five years and an interest rate of 5.8% to 6.75% above the London Interbank Offer Rate (LIBOR).
Under the agreement, the loan facilities would have a longer repayment period of seven years and a fixed interest rate of 7.62%.
Zimbabwe owes foreign lenders, including the World Bank and the African Development Bank, more than $ 8 billion. (Reporting by MacDonald Dzirutwe; Editing by Kirsten Donovan)