THE Ministry of Finance and National Planning has announced that Zesco paid US$82 million to China Exim Bank to settle part of a $320 million loan.
In a statement issued by the office of Secretary to the Treasury Felix Nkulukusa, it was disclosed that this loan was used to finance the 360-megawatt Kariba North Bank Extension (KNBE) power project, managed by a ZESCO subsidiary.
“In November 2009, ZESCO Limited and China Exim Bank signed a US$320 million agreement to partially finance the development of the 360 Megawatts (MW) Kariba North Bank Extension (KNBE),” read the statement.
“KNBE is a generating asset owned and operated by Kariba North Bank Extension Power Corporation Limited, a subsidiary of ZESCO Limited.”
The ministry stated that the payment, approved by ZESCO’s Board in December 2022, was made to reduce debt and save on future interest costs.
It was completed before Zambia reached a debt treatment agreement with Official Creditor Committee (OCC), which was achieved in June 2023 and reflected in the Memorandum of Understanding (MoU) of October 14, 2023.
The Ministry clarified that the payment was lawful and made in good faith.
“..there should be no suggestion that this debt was not lawfully owed or that the payment was made other than in good faith. In addition, both the Government of Zambia and Zesco have been fully transparent in respect of the payment,”
“The payment was reflected in the Ministry of Finance and National Planning Quarterly Debt Statistical Bulletin for End March 2023. It was transparently reported in official financial updates and acknowledged by the International Monetary Fund (IMF) in December 2023.”
The government assured the public that discussions are ongoing to ensure the payment is accounted for under Zambia’s debt restructuring agreement.
This announcement follows Zambia’s recent signing of its first bilateral debt deal with France under the restructuring framework.
Kalemba December 14, 2024
