Govt has so far paid $41.4m towards Eurobond

Bond and Derivatives Exchange

PARLIAMENT heard yesterday that Government has so far paid US$41.4 million as interest towards the $750 million Eurobond obtained last year.

Finance Deputy Minister, Keith Mukata said the funds were repaid in terms of both the principal and interest, with the first being paid in February and September, this year.
Mr Mukata said of the Eurobond, no funds had been utilised so far but that expenditure would commence within this month after completion of various tender procedures involving the sectors that would receive financial injection.
“Mr Speaker, the debt will be repaid as a bullet payment (lump-sum) at the end of 10 years. The only funds that are being paid now are interest payments that will continue on a semi-annual basis for the life of the bond, which is in 2022. No funds were spent as at August 31, 2013. we, however, expect the utilisation to commence within September 2013,” Mr Mukata said.
Mr Mukata was responding to a question raised by Mbala MMD Member of Parliament, Mwalimu Simfukwe, who wanted to know which sectors benefited from the Eurobond, and how much had been spent so far.
He said part of the Eurobond had been injected in the energy sector, where $255 million had been channelled for the Kafue Gorge Hydro power project as well as the Zesco’s distribution network.
On the Kafue Gorge project, he said the funds were released to Zesco in 2012 and the process of running tenders for developers and co-financiers had been completed.
As part of the preparation for the project works, it was expected that $27,120,000 would be spent by the end of December, this year.
The road infrastructure had received $310 million, in a project, which would involve the construction of the Kitwe-Chingola dual carriageway and repayment of the Formula One road project which was undertaken before the Patriotic Front came into office in 2011.
He said $100 million had been released to the Road Development Agency (RDA), this year and that by August, this year, K84.2 million had been utilised.
He said the Pave Zambia Road projects had received $65 million, and that the funds had also been released to the RDA.
The Agency had so far utilised K43.97 million, which was utilised on procurement of equipment.
The railway sector had received $120 million for an overhaul project and that the Zambia Railways Limited (ZRL) had completed the award of tenders in August, this year.
Mr Mukata told the House that $29 million had been channelled to the University Teaching Hospital in Lusaka, Ndola, Kitwe and Livingstone hospitals. And K5.1 million had been spent for design and preparatory works as at August 31, this year.
He said the Development Bank of Zambia had received $20 million for a credit line to Small Medium Entrepreneurs and that by August, this year, K8.9 million had been utilised so far.