A DELEGATION from the European Investment Bank (EIB) is expected to arrive in Zimbabwe on Wednesday next week for a three-day visit which will culminate in the sealing of deals with private sector players in the country, a European Union official has said.
VICTORIA MTOMBA BUSINESS REPORTER
The team is expected to meet finance minister Patrick Chinamasa and executives from the private sector, EU head of delegation to Zimbabwe Aldo Dell’Ariccia said yesterday.
Dell’Ariccia said because of the level of arrears that Zimbabwe owes to the EU, the EIB cannot lend money to the government of Zimbabwe.
He said Zimbabwe’s arrears to EU were over€200 million [about $272 million].
“The mission is coming here to see what kind of projects it can have with the private sector. The money they (mission) would invest would depend on the projects that would be presented. It could be €40 million [about $54 million] if they are good projects,” he said.
Dell’Ariccia said the EIB team would include the head of Southern Africa Indian Ocean, senior investment officer from Pretoria.
According to the finance ministry Zimbabwe owes EIB $302 million.
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Dell’Ariccia said the EU has been working with the private sector and the Zimbabwe National Chamber of Commerce, Bankers’ Association of Zimbabwe, Chamber of Mines of Zimbabwe and other sectors in the economy.
He said through various cooperation and development initiatives €1,3 billion (about $1,7 billion)has been channelled to Zimbabwe through the EU and its member states since 2009.
Zimbabwe has a huge debt overhang that is estimated to be over $6,1 billion owed to the International Monetary Fund, World Bank, African Development Bank (AfDB), EIB and other financiers.
That debt overhang comes at a time sanctions against the country were militating against Zimbabwe’s access to cheap financing.
However, the private sector has managed to get lines of credit from lenders after providing bankable projects.
In 2011, AfDB’s board of directors approved an $8 million loan to finance Lake Harvest Aquaculture project on Lake Kariba, the bank’s first private sector investment in Zimbabwe after many years.
The coming in of EIB executives would be a relief for local companies that have been struggling to access long-term loans with institutions offering financing on expensive short term basis.
EIB is headquartered in Luxembourg and funds its operations by borrowing on the capital markets rather than drawing on the EU budget. It is owned by the 28 member states of the EU.
