Zimbabwe Road Agency seeks to extend $140m loan by ten years
The Zimbabwe National Road Administration Agency is negotiating with the Development Bank of Southern Africa to restructure $140-million due in May to be repaid over ten years.
The roads agency will adopt a “more cautious” approach in settling the loan due to exchange-rate fluctuations, CEO Nkosinathi Ncube said in an interview in the capital, Harare.
“In the past where we went wrong, we had 10-year period and then the exchange-rate policy changed and we went into arrears, so we are restructuring so that we get another 10 years with DBSA,” Ncube said.
DBSA loaned Zinara $206-million in 2011 for repairs and expansion of the 700 km (435-mile) Plumtree-Mutare highway. The facility carried an interest rate of 6.182% and a penalty of 2% should the agency skip payments. Zinara has renegotiated that interest rate down to 5%, Zinara’s finance director, Adam Zvandasara, said separately.
The agency is expected to disburse Z$17-billion ($141-million) for roads this year, almost 80% more than 2021. It projects revenue collection of Z$34-billion, Z$5-billion of which will be spent on settling the DBSA debt, said Ncube.
A number of local lenders proposed to take up the loan, but none has been able to match the interest rate. “So far, the interest rate and terms DBSA is offering seem to be the best.”
Most of the country’s 98 000 km road network is riddled with potholes because of decades of underfunding and neglect.
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