AfDB seeks way forward on Zim arrears

million, which means the country cannot access cheap funding for infrastructure projects from the continental bank.
AfDB lead economist Mr Damon Kitabire yesterday told the Herald Business that financing for public projects in the country would resume as soon as the arrears are dealt with.
Although funding for Government projects has been clogged, the AfDB has continued to finance “bankable projects” from the country’s private sector as demonstrated by its extension of a US$8 million loan to finance Lake Harvest’s aquaculture project on Lake Kariba.
“Funding from the bank’s own funds will resume as soon as an amicable solution on arrears has been agreed and implemented,” he said.
Mr Kitabire, however, said the bank was financing infrastructure projects in the country through the Zimfund and other facilities.
“The AfDB is managing the Zimfund which has grant contributions of about US$120 million from bilateral donors (United Kingdom, Australia, Germany, Norway, Denmark, Sweden and Switzerland) to fund water and power projects in Zimbabwe.
“In addition, we are utilising funding from the African Water Facility to the tune of two million euros for the water and sanitation rehabilitation project in Chitungwiza.”
Indications are, however, that the Government is expediting the implementation of the Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy (ZAADDS) that was launched earlier this year, which is expected to retire the country’s debt overhang to a number of multilateral lenders including the AfDB.
ZAADDS includes a combination of old debt relief mechanisms, injection of capital by development partners, leveraging of natural resources and the removal of economic sanctions.
Earlier this year, Reserve Bank of Zimbabwe Governor Dr Gideon Gono said through ZAADDS the country was engaging the AfDB to access a US$500 million facility to assist in clearing its arrears.
The facility, which is also supposed to benefit “fragile states” including Somalia and Sudan with outstanding arrears to the bank.
It however comes on a first-come-first-serve basis.