• Wed. Jun 12th, 2024

Govt backs US$193m loan with royalties

ByEconomic Times

Mar 31, 2023

By ETimes

Government has signed a US$193,3 million hospital and health centre construction financing deal with South African bank ABSA and Standard Bank Limited Zimbabwe.
 
The financing deal kicks off the phase three of health care centre provision in all ten provinces of the country which began in 2019. In this phase a total of 5 district hospitals with a bed capacity of 60 and 22 health centres with a bed capacity of 20 will be constructed.
 
In a statement, the Minister of Finance and Economic Development, Hon. Prof. Mthuli Ncube said, “The Government of Zimbabwe is pleased announce that, Treasury, through the Zimbabwe Public Debt Management Office has successfully negotiated for a US$193.3 million sovereign loan facility from Standard Bank Limited (South Africa), ABSA and Standard Bank Limited Zimbabwe, for the financing of Phase 3 of the Project, for the full turnkey construction of 5*60-bed District Hospitals and 22°20-bed Health Centres across the country’s ten provinces.”
 
The phase 3 project is expected to be completed within 3 years if government manages to de-risk the project, which is a condition for the participating banks.
 
As a result, government has pledged to de-risk the project, through the use of US$35 million SDR Cash Cover, which was set aside in the 2023 National Budget, and will be deposited upfront into an Offshore SDR Escrow Account.
 
Additionally, US$2,5 million monthly deposits collected from royalties are to be ringfenced into an Offshore Debt Service Reserve Escrow Account, and engagement of ECIC to provide insurance cover will be done as part of the de-risking process.
 
This is the second of such deals as in 2019, UK based construction company NMS Infrastructure signed a US$210 million contract with the Ministry of Health and Child Care, Zimbabwe for three 200-bed district hospitals and 30 x 22-bed health centres for the enhancement of public healthcare across the country – Harare

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