HARARE, March 4 (Reuters) – The African Import and Export Bank (Afreximbank) has agreed to help Zimbabwe raise funds to refinance $ 1.4 billion in loans to the pan-African lender, a report showed on Thursday. copy of the agreement seen by Reuters.

The deal will give the country some breathing space on loan repayments to Afreximbank, which has become one of Zimbabwe’s biggest lenders after being kicked out of international financial institutions two decades ago for failing to repay debts .

Between December 2017 and December 2019, Zimbabwe, in need of foreign currency, through its central bank, entered into three loan agreements with Afreximbank in the amount of $ 1.4 billion and using gold and silver. platinum as a guarantee.

The loan refinancing agreement, dated December 2020, was signed by central bank government John Mangudya on behalf of Zimbabwe and Ibrahim Sagna, head of Afreximbank’s advisory and capital markets.

“Afreximbank will make every effort to help increase the debt, as stated in this mandate letter. For the sake of clarity, Afreximbank will identify and approach financial institutions and potential investors who are potentially willing to provide funding to the Reserve Bank of Zimbabwe and obtain letters of intent from interested lenders / investors, ”the agreement reads. .

Mangudya did not answer his phone when called by Reuters, nor did he respond to a message asking for comment. Afreximbank did not immediately respond to questions sent by email.

Afreximbank will act as sole advisor and will remain a creditor. The original loans had terms of between three and five years and an interest rate of 5.8% to 6.75% above the London Interbank Offer Rate (LIBOR).

Under the agreement, the loan facilities would have a longer repayment period of seven years and a fixed interest rate of 7.62%.

Zimbabwe owes more than $ 8 billion to foreign lenders, including the World Bank and the African Development Bank. (Reporting by MacDonald Dzirutwe; Editing by Kirsten Donovan)