EU shuts door on Zimbabwe financing

EUROPEAN Union (EU) ambassador to Zimbabwe, Jobst von Kirchmann, says the bloc will not lend to the southern African country owing to arrears even if sanctions are lifted.

The EU ambassador said the country had significant debt arrears with international banks that needed to be cleared before lending could be resumed.

The EU official made the remarks yesterday in Victoria Falls at the 2024 International Renewable Energy Conference Expo.

The expo is organised by Alpha Media Holdings (AMH), publishers of the daily newspaper NewsDay, and two weeklies, Zimbabwe Independent and The Standard. AMH also runs Heart & Soul TV.

AMH is holding the event with support from the Energy and Power Development ministry.

"The country has borrowed money and didn't pay it back, so for financial institutions, the country has defaulted, it's very simple. Until the arrears are cleared. So, a sovereign guarantee from someone who has defaulted doesn't work with the bank and it also has nothing to do with sanctions, please," Kirchmann said.

"If all sanctions in the world, from the US [United States] and wherever, are lifted, Zimbabwe would still have arrears and still not get any sovereign lending.

"The EU doesn't have sanctions. It has only instructed European countries to instruct their own companies not to deliver any arms to Zimbabwe.

"That's the only thing. We do not have any sanctions. It has nothing to do with borrowing. These are two totally different things."

Early this month, the EU extended sanctions on the Zimbabwe Defence Industries by a year.

The West imposed sanctions on Zimbabwe at the turn of the millennium over human right's abuses and misgovernance as well as electoral fraud.

Kirchmann said the EU appreciated efforts by the government to clear its arrears with international financiers.

"I am a big defender of public private partnerships, but right now, public private partnerships mean governmental involvement," he said.

"You go to an international financing institution and they tell you that you have a defaulter as a partner, and we are not financing."

He added: "So, while I agree that it is an ideal model and a good thing to have, right now, as far as international financing, it's a concern and is not a good model. It should be a private sector model right now."

According to the EU, Zimbabwe's external debt position now stands at US$18,7 billion.

This comes at a time when the country needs at least US$2 billion for energy infrastructural projects, which also includes funding for renewable energy.

In total, the country requires US$40 billion for capital projects.

AMH group chief executive officer Kenias Mafukidze said harnessing the abundant renewable energy, in particular, from resources in the Sadc region, accorded the country the opportunity to transform its energy systems.

"Renewable energy is not just about generating electricity; it is about driving economic growth, creating jobs, improving energy access and mitigating climate change. By harnessing the abundant renewable energy resources in the Sadc region, we have the opportunity to transform our energy systems, enhance energy security and promote sustainable development that benefits all our citizens," he said.

"Throughout the next few days, I encourage each and every one of you to actively engage, exchange ideas and collaborate with your peers.

"Let us seize this opportunity to learn from each other, inspire one another, and catalyse the transition towards a more sustainable energy future.

"I know that over the last five years, this conference has sparked close to US$1 billion in investment into the sector."