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Germany demands $550m from Zimbabwe

Staff Writer |
Germany is demanding about $550 million loan repayment from the financial broke Zimbabwe government before consider offering fresh capital, the country's ambassador told Parliament.

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Zimbabwe owes $507 million to the German Development Bank (Kreditanstalt fur Wiederaufbau — KfW).

KfW, which is majority owned by the German government, is also owed $43 million by the mothballed Ziscosteel which borrowed the funds to construct a steel plant in 1998, the Source reported.

"(The Zimbabwe) government has issued a statement saying they have the money available to pay back arrears of World Bank and the WB is not under obligation to offer any fresh loans to Zimbabwe because of the arrears.

"We are guided by the same policies," the German ambassador to Zimbabwe, Thorsten Hutter said when he appeared before the Parliamentary Portfolio Committee on Foreign Affairs.

"The next step would be that government would have to pay back the arrears of WB, AfDB and Paris Club which we are part of, partly because we have learnt money to Zimbabwe before which has not been paid back. That will have to be addressed.

"It may look like we do not want to give money to Zimbabwe for political reasons – that is not true."

In 2004, KfW took its case to the International Court of Arbitration (ICA) after the cash strapped Harare government defaulted on repayments.

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