ZIMCOKE (Private) Limited will take over part of the debt that the government of Zimbabwe owes to German Development Bank (KfW) amounting to $225 million.
BY KUDZAI MUCHENJEKWA
On Friday, ZimCoke had an official ground-breaking ceremony at Zisco steel plant which was last functional in 2008, taking over the plant that manufactures coke.
Speaking at the ceremony, ZimCoke chief executive officer Bill Moore said ZimCoke had gone on to take up part of the debt that Zisco steel had with KfW.
“The key aspect of the project is that ZimCoke is taking over KfW debt from Zisco. KfW is a German government bank and one of the biggest development banks in the world. This debt had ballooned to $225 million. This was done to relieve the government of Zimbabwe of a significant portion of its biggest bilateral debt,” Moore said.
The country’s debt arrears amount to about $5,6 billion which is split between multilateral creditors ($2,2 billion), the Paris Club, an informal grouping of creditor nations ($2,7 billion), and non-Paris Club creditors ($700 million).
Germany is a member of the Paris Club.
On top of that debt, the country owes the African Development Bank $610 million, the World Bank ($1,2 billion) and the European Investment Bank ($212 million).
Dealing with debt comes as economists say this will unlock more funding from international financial institutions and foreign direct investment from Western countries.
Addressing delegates at the ground-breaking ceremony, Industry, Commerce and Enterprise Development minister Mike Bimha said the project entailed the resuscitation of the giant steel making company Zisco through the coming on board of ZimCoke.
“This event here entails also the resuscitation of Zisco. As you may be aware, agreements have already been signed with the potential investor to rehabilitate Zisco. As we gather here the action plan for the resuscitation of the steel giant is already in place,” said Bimha.
ZimCoke has taken the other part of the Zisco plant which deals with the coke manufacturing while a Chinese investor has taken the steel-making plant.
ZimCoke and Zisco signed an agreement of sale in 2017 where ZimCoke bought the coke-making assets of Zisco, consisting of the plant machinery, land and buildings and associated infrastructure.
Bimha said that ZimCoke will inject a substantial investment of $133 million to revive the coke plant and produce export sales of $65 million in the first phase of operations