Zimbabwe News and Internet Radio

German bank wants guarantee over Zisco debt

By Munyaradzi Musiiwa

German Development Bank (KfW) has engaged Government to guarantee the sovereignty of the $225 million debt, which it is owed by the Zimbabwe Iron and Steel Company (Ziscosteel) in case ZimCoke that recently made an undertaking to take over the debt fails to honour it.

A blast furnace at Ziscosteel. — File picture
A blast furnace at Ziscosteel. — File picture

The German government is also monitoring the progress of the project as it seeks to recover the debt, which Zisco has failed to service since 2002.

German Ambassador to Zimbabwe Dr Thorsten Hutter said there was need for Harare to guarantee the sovereignty of the debt in case the ZimCoke is incapacitated to settle the debt.

“I am going to see that project on Friday so what I can say now is that there is an interest by a private company to start with the rehabilitation of the coke batteries and the project has already been inaugurated. However, there are still some obstacles with regards to the handing over of responsibility by Ziscosteel which has not been resolved.

“We have an interest in the project because the German government through its developmental bank had offered development loans to Ziscosteel and the Government of Zimbabwe in the 90s which has not been paid since 2002.

“If you are aware the arrangement is that the company that comes in to take over coke batteries to take over the repayment of the date, which will be a relief from Government of Zimbabwe.

“This pre-suppose sus as the German side that the Government of Zimbabwe declares that it will be ready to guarantee the sovereignty of the debt in case the company at some point and time in future will not be able to repay the debt.”  The Herald