EUROPEAN Investment Bank (EIB) officials are due to visit Zimbabwe on a mission to explore funding opportunities for the private sector, an official has said.
The EIB suspended lending to the Zimbabwean Government over a decade ago due to a long-term debt which remains unpaid.
According to figures in the 2014 National Budget, the country owes the European regional bank in excess of US$300 million. The EIB has been in the country on two missions in the past and is due for a third one soon, according to the European Union’s ambassador to Zimbabwe Aldo Dell’Ariccia.
“The EIB has demonstrated its interest in working in Zimbabwe with the private sector. We already have had two missions and the third one will come soon (with a mission) to see which projects can benefit from credit from the EIB,” the EU ambassador said.
“Its budget line only permits to have projects with the private sector.”
EIB officials last visited Zimbabwe in January 2013 to assess funding opportunities. The EU ambassador said investment by the bank would help ease working capital and liquidity constraints which local industry is battling with. The local industry requires over US$2 billion in the short-term to bridge funding gaps which have crippled capacity utilisation and resulted in the temporary closure of some firms.
Business leaders from Zimbabwe recently visited the EU to petition the 28-member block to lift sanctions imposed on Zimbabwe over a decade ago. The embargo has tainted Zimbabwe’s image as an investment destination and is estimated to have cost the economy over US$42 billion.
The EU ambassador said it was not because of the sanctions that the EIB was not lending to the Zimbabwean Government but because of the debt.
“The EIB has with Zimbabwe a level of arrears which is above the thresholds that permits it to have credit with the Government of Zimbabwe. It is not the measures (sanctions) blocking the EIB loans, it’s the debt that Zimbabwe has with the bank,” he said.
In addition to the EIB, Zimbabwe also has outstanding debts with the World Bank, International Monetary Fund, African Development Bank among others. The total owed to multilateral institution is estimated at US$2,49 billion as at the end of last year. – New Ziana.