Friday, March 29, 2024

Zimbabwe Negotiating the $114.8 million Zambia Debt

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VICE President Inonge Wina (l) shakes hands with Zimbabwean Finance and Economic Development Patrick Chinamasa while Finance Minister Felix Mutati (c) looks on. This was shortly before the official opening of the Batoka Gorge Hydroelectric Power, Investors Conference at David Livingstone Safari Lodge in Livingstone
VICE President Inonge Wina (l) shakes hands with Zimbabwean Finance and Economic Development Patrick Chinamasa while Finance Minister Felix Mutati (c) looks on. This was shortly before the official opening of the Batoka Gorge Hydroelectric Power, Investors Conference at David Livingstone Safari Lodge in Livingstone
Zimbabwe is in discussions with Zambia over payment modalities for the US$114,8 million interest on the Federation-era debt that Zimbabwe owes Zambia.

The debt has been threatening co-operation between the two countries on the proposed construction of the massive Batoka power project.

Finance and Economic Development Minister, Patrick Chinamasa, last week told journalists that the two countries were currently in discussions and could soon strike a deal on payment.

“The debt is still about US$114,8 million in interest but we have started engaging them (Zambia) on how we can pay it.
But we don’t want to discuss it in public. When we are done with our discussions, we will let you know,” said Chinamasa.

The interest component emanates from a US$70 million debt to Zimbabwe which the country inherited the debt after taking over power generation assets that had been shared with Zambia.

The debt was for the shared cost of the Kariba Dam construction and associated infrastructure during the tenure of Central African Power Corporation (CAPCO), a power firm jointly owned by the governments of Zimbabwe and Zambia when they were still part of the Federation of Rhodesia and Nyasaland, which was dissolved in 1963.

The debt also included assets taken over from CAPCO. The US$70 million principal amount has since been paid off by the country’s integrated power generation and distribution group, ZESA Holdings.

ZESA, however, through the assistance of the Ministry of Energy and Power Development, transferred the interest component from its books to the Ministry of Finance in 2015, arguing that the liability was a government-to-government debt.

CAPCO was running the Kariba power project for the two countries but was disbanded in 1987, and was succeeded by the Zimbabwe River Authority (ZRA).

Its assets were distributed to national power companies in the two countries, which are ZESA Holdings and Zambia Electricity Supply Corporation (ZESCO).

After distribution of the assets, the government of Zimbabwe owed the government of Zambia US$70,807,000.

The amount remained outstanding, and Zimbabwe in February 2012 signed a new acknowledgement of debt with a payment plan.

Government then transferred the debt to ZESA Holdings saying it was the beneficiary of the distributed assets.

ZESA Holdings was, however, pressured to pay the principal amount after Zambia threatened to pull out of a deal for the two southern African countries to jointly construct the Batoka Gorge Hydro Power Station on the Zambezi River.

Zimbabwe and Zambia signed a Memorandum of Understanding to jointly construct Batoka Gorge Hydro Power Station in 2012, with each country expected to get 1 600 Megawatts (MW) of electricity from the project, a development which would help boost power supply in the two southern African countries.

The agreement on the Batoka project, situated about 54 kilometres downstream of Victoria Falls on the Zambezi River, was therefore dependent on Zimbabwe’s commitment to pay off the US$70,8 million debt.

52 COMMENTS

    • I trust Lungu will name the right decision.

      The best thing to do will be to write off the debt.

      You don’t ask for money from
      A country that made the tenets of democratic small prints you enjoy.

      I dated a Zimbabwean and they are better men everywhere and deserve sympathy for me

      Thanks

      Bb2014,16

    • Other fine Zambian women have dated men of all types of nationalities so Zambia should on that premise just write off or give away everything. Dora a whore like you is dating a Congolese with Namibian connections and she’s a Minister so we can walk away from any debts, great.

    • @Mushota you come up with these bizarre scenarios and conclusions! Imaging forgiving the National Debtor because that shagger of of yours either has early ejaculation or doesn’t have the agility of shugging you and you want to punish your compatriots because of that!
      Your history knowledge also shows signs of being an ignoramus. How can you say “…..YOU DON’T ASK FOR MONEY FROM A COUNTRY THAT MADE THE TENETS OF DEMOCRATIC SMALL PRINTS YOU ENJOY..”

    • I think Zambia need dig more debts from Zimbabwe. Most buildings in Harare were built from Zambian copper during the fucvvking federation. And Zimbabwean women are not good in bed, so they can’t pay in sex, like briton still doing. Guys in Europe keep it up.

    • ZIMBABWE, SHOULD PAY IN KIND. LET ZIMBABWE GIVE UP SOME %AGE OF THE BATOKA HYDRO POWER TO ZAMBIA. INSTEAD OF ZAMBIA-ZIMBABWE SHARE 50/50 RATIO. LET IT BE 65/45 RATIO OF POWER SHARE OF THE COMPLETED BATOKA. THAT IS THE EASIEST WAY ZIMBABWE COULD PAY ZAMBIA BACK.

    • @Mushota, Buchende wako does not result in Zambia forgiving the debt. Deal with that in your bedroom. Meanwhile Mugabe is busy travelling as Lungu from country to country and you are here expressing your ignorance. Mushota, you are useless.

  1. The Zimbabwe govt is broke and is failing to pay Civil Servants salaries so where will they get USD 114.8 m? The Zimbabwe govt’s credit rating is very bad so which International Financial institutions can lend $billion for the Batoka Gorge? This is just talks about talks. The Illegitimate Lungu govt is equally broke so nothing will happen. Thisis case of two bankrupt countries trying to show some solidarity but nothing much will happen.

  2. Time was when Zimbabwe was Zimbabwe, and Zambia was “Zimbabwe’s northern neighbor.” Zimbabwe was a pearl then, soon after its independence in 1980. Both the Chronicle and the Herald would not refer to Zambia as Zambia, then a country under “ESAP” – Economic Structural Adjustment Program. Surprisingly, Zimbabwe can now afford to refer to Zambia as Zambia. Did we know then that Zimbabwe owed us money? Do we know now? Why can’t they pay us our money and then we move forward? The ungrateful spirit of Zimbabweans is utterly disgusting. They used to laugh at us. They still would do so, if they could.

    • You are right, they are worse than the xenophobists of South Africa. How they mocked and laughed at our misery is something that torments me day and night. I hope they have learned a lesson.

    • You are very right. Zimbabweans were very disgusting when we were facing shortages of goods. I remember my cousin being humiliated over importing barter margarine by Zimbabwean Custom Officials at Livingstone Boarder Post. But us Zambians are very peaceful and welcoming people. When the recent economic crises was ravaging our neighbors , we gladly welcomed them to sell their biscuits. I urge you Zimbabweans to have a spirit of neighborliness and compassion.

  3. Time was when Zimbabwe was Zimbabwe, and Zambia was “Zimbabwe’s northern neighbor.” Zimbabwe was a pearl then, soon after its independence in 1980. Both the Chronicle and the Herald would not refer to Zambia as Zambia, then a country under “ESAP” – Economic Structural Adjustment Program. Surprisingly, Zimbabwe can now afford to refer to Zambia as Zambia. Did we know then that Zimbabwe owed us money? Do we know now? Why can’t they pay us our money and then we move forward? The ungrateful spirit of Zimbabweans is utterly disgusting. They used to laugh at us. They still would, if they could.

  4. This is something that should be asked as to whether or not we as Zambians agree to and not about withdrawing our membership from the ICC.

  5. Negotiating a debt a $100m with someone who is also negotiating a $1 billion loan agreement with a lender…clearly this is a non starter. I am even surprised Lazy’s govt entertained such an issue being tabled but then again Lazy is out of touch with reality!!

  6. It happens every time. When you are completely broke, you remember even the poor komboni man who owes K20 for 10 years, even if you know he has no means of paying you.

  7. kiki both dictators owe huge sums of money. Irresponsible borrowing without any future plans as how to generate income. They dont care as long as they are chewing and enriching their own families. The rest of us and our future generations will have to pay for the f00lish decisions by increased tax burdens. As usual it is the poor that continue to suffer. Lungu must go!!!

  8. I wonder why some people fell duty-bound to comment on everything even when they have nothing to offer.

    Some the comments above have no value whatsoever.

  9. @11 NEZ, Lungu to go where? He is going nowhere until we say so and that will be at least 53 months from.today. Share that with HH and all other donkeys.

  10. This NEZ thing must be HH himself!!surely how can a normal person link Edgar Lungu to this debt of 1963 or there about?losing so many elections has made you guys in upnd mad!!WHETHER YOU LIKE IT OR NOT,ECL WILL RULE YOU UNTIL 2021 AND MAYBE BEYOND 2021!!!

    • Do you know that the debt Zambia has accumulated since pf took over is more than that accumulated from 1960 till 1980. And just because the debt was accumulated years ago doesn’t mean that the illegal pf doesn’t have responsibility for it. You were desperate to form government now you running away from responsibility. You are even failing to simply ask for money owed to you because lungu is scared of his master mugabe

  11. Nalomba ma discussions! I heard about these discussions 5 years ago. Mugabe is broke imwe Bantu. Let’s just invade Zimbabwe

    • You talk as if Zambia is a super rich country . Once Mugabe ( Kaunda’s protégé ) goes Zim gonna be better than Zambia and you know that .

    • Where do I say Zambia is super rich? Just come to terms with the fact that Zimbabwe which was built on Zambia and Malawi resources has been destroyed and no amount of wishing will rebuild it.

    • Unsalable wethu,

      @20 you cracked my ribs. We don’t need your docility to affect us again. We fought for the liberation of your country for free. You even failed to honour your debt. No double dipping this time.

      We don’t want another “Mandevu” in Lusaka!

    • With Alex Muliokela as President and Minister of Defence and Joseph Chinotimba as Vice President and Minister of Finance!

  12. And we as Zambia still want to build batoka with Zimbabwe. Lets build one in Zambia so we don’t share costs. Zimbabwe is broke. Just saying

    • astride bance; good logic; once upon a time those zim buggers refered to us Zambians as OUR POOR COUSINS ACROSS THE BORDER.

  13. Jonathan_Same Questions being Asked by Financiers on the quality of attaching Zimbabwe Zesa but really ZESA should be seen as a different party to the Batoka although the USE of these entities ZESCO and ZESA in pre formation and capital Gives that impression

    The Zimbabwe Zambia Botoka structure can be crafted and reengineered and be seen as separate viable SPV apart from the two utilities

    Zimbabwe is still investable also with good likable people

  14. In analyzing some of the comments, I realized that some shallow minded subscribers of this blog are ecstatic with the crises in Zim. Forgetting that prosperity in Zim can benefit Zambians too. For those who treated Zambians badly in the past I’m appologising on behalf of all Zim citizens. But remember they say history repeats itself whether good or bad Zim shall rise again and work with its neighbors including Zambia to ensure that mutual development is realized in the whole SADC region. Our hands are tied we don’t want war nor to entertain war mongers we have had enough war to last a lifetime in our minds, Mugabe will go when his butchers can No longer save him anymore. The sanctions will be lifted we will earn the respect and diginity. God bless Zimbabwe.

  15. In analyzing some of the comments, I realized that some shallow minded subscribers of this blog are ecstatic with the crises taking place in Zim. Forgetting that the prosperity in Zim can benefit the Zambians too. For those who treated Zambians badly in the past I’m appologising on behalf of all Zim citizens. But remember they say history repeats itself whether good or bad. Zim shall rise again and work with its neighbors including Zambia to ensure that mutual development is realized in the whole SADC region n etc. If I can remember well, in Bulawayo there is a surbub called Sizinda which housed, still is the home to Zambians n Malawians expatriates who worked n enjoyed everything that Zim had to offer.They were treated with brotherly love still they are. Even though as hungry as we are,…

  16. But you see the problems with these guys is they don’t understand united we stand divided we fall . What’s going on in Zimbabwe is exactly what happened to Zambia in the early nineties under kk . It also happened to Malawi in the eighties and its a cycle . A federation of Zimbabwe , Zambia and Malawi is not a bad idea and we wouldn’t even mind having a Zambian as the leader . If these 3 countries were united there wouldn’t have been a collapse of the zim dollar and the kwachas and the citizens of these nations would have been better today .

    • I wonder whether you can liken Zambia’s KK experience with Zimbabwe. Zambians stood up and fought. Zimbabweans keep fleeing their problem expecting Neighbours to sort things out for them. They now live in SouthAfrica, Zambia, Botswana, UK, Mozambique and cry for help from there. Liberate thyselves! How can you fail to topple a 90+ year old dictator?

  17. Although any energy investor will be looking at seasonally adjusted information on Growth potential norminal or real In USD that creates business for the power to be evacuated.He will also be looking at country fiscal and risks in domestic and external debt as measure of that GDP growth potential including the state of the current accounts in reviewing the SPV
    The health and Final regional and domestic demand for industrials including the issues of climate change will be critical

    That is why the China Hydro and Syno creates the lead time Really you will discussing the case of Direct lending to the SPV or through syndication by Banks With…

  18. With liquidity,yields and default measures at a core The economics of the project are still important for either direct lenders or syndicators

  19. It is true that our neighbours, Zimbabwe (Southern Rhodesia) benefited more in the federation than all the other partners namely; Zambia (Northern Rhodesia) and Malawi (Nyansaland). Therefore if there is anything we can salvage for our people please let us get so that it goes towards assisting the Govt of the day with their mandate to provide for its citizens.

  20. It is true that our neighbours, Zimbabwe (Southern Rhodesia) benefited more in the federation than all the other partners namely; Zambia (Northern Rhodesia) and Malawi (Nyansaland). Therefore if there is anything we can salvage for our people please let us get so that it goes towards assisting the Govt of the day with their mandate to provide for its citizens.

  21. But dont you all realise that all Zimbabwe’s woes are caused by the sanctions being implemented by Western imperialists !!!

    Has nobody been listening to Mugabes speeches ?

    Mugabe had no part to play in their economic woes.

    Zambians must understand this and must be willing to accept repayment in the currency of its sovereign neighbour. Why is the debt denominated and styled in the currency of white imperialists and colonialists ??

    Let Zambia take a stand and insist on the debt being repaid in Zim Dollars !!

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