The Government of Zimbabwe has secured a US$360.5 million funding facility from PIM Nominees (Private) Limited for the rehabilitation and upgrade of the 354km Harare-Kanyemba Road.
Kanyemba is a border town on the Zambezi River where Zimbabwe, Zambia and Mozambique meet just upstream of Lake Cabora Bassa.
A separate $5 billion loan was also secured for other road networks under the Emergency Road Rehabilitation Programme Phase 2.
Finance and Economic Development Minister Professor Mthuli Ncube announced the availability of the loan facilities in an Extraordinary Government Gazette published this week. Reads the notice:
It is hereby notified, in terms of section 300 (3) of the Constitution of Zimbabwe, as read with section 18(2) of the Public Debt Management Act [Chapter 22:21], that the Minister of Finance and Economic Development signed a Loan Agreement for the Harare– Kanyemba Road Construction Project between Government of Zimbabwe and PIM Nominees (Private) Limited on June 6, 2022, under the terms specified in the Schedule.
TERMS OF LOAN AGREEMENT
1. The loan amount is US$360 500 000,00, loan to be disbursed through a revolving facility of US$60 000 000,00, at a time for 6 times. 2. The borrower is Government of Zimbabwe. 3. The lender is PIM Nominees (Private) Limited. 4. The tenure of the Facility will be a period of 6 years. 5. The loan facility shall be utilised for the sole purpose of rehabilitation and upgrading of the Harare to Kanyemba road over 5 years. 6. The loan interest rate shall be 1-month SOFR + 5% per annum. 7. The drawdowns are subject to a deposit of 30% of the revolving facility being US$18 000 000,00, which will be paid for each and every drawdown of US$60 000 000,00, subsequent to the first drawdown until the facility is drawn down in full. 8. The grace period is a period of nine (9) months after signature of the Loan Agreement. 9. The penalty interest charge on unpaid due payments is 3% for the number of days in arrears.
Prof Ncube also gazetted separate loan facilities of US$600 million and $4 billion where the Government under the stewardship of ZINARA will superintend infrastructure projects under ERRP Phase Two.
The construction of the Harare-Kanyemba Road is expected to boost connectivity and convenience as travellers to the Democratic Republic of Congo and Tanzania cut their journeys by close to 400km.
The project is being spearheaded by a local contractor, Exodus Construction, who has been working on redesigning and the total construction of a 10km road that links Mahuhwe and Mushumbi.