DEPUTY Minister of Finance Christopher Mvunga yesterday told Parliament that part of the US$1.25 billion Eurobond issued this year has been earmarked to finance the 2016 National Budget.
Mr Mvunga said the major allocations included $ 410.7 million for the improvement of road infrastructure including rural roads.
He said US$268 million would go towards domestic debt swap and clearance, while US$40.0 million would be for maintenance of canals and procurement of maritime equipment.
He said US$ 45.2 million and US$ 20.3 million would be used to develop infrastructure in the education and health sectors.
“A total of US20 million was allocated for water and sanitation projects,” Mr Mvunga said.
Mr Mvunga was responding to UPND Milambo Member of Parliament (MP) Mr Austin Milambo who wanted to know which projects would be financed using the US$ 1.25 Eurobond which was issued this year. He said other allocations were $ 45.2 million for citizens and youth empowerment while $21 million has been set aside for the agriculture sector and $15 million for on-lending to State owned enterprises. Mr Mvunga said the balance of the Eurobond had been earmarked for part financing of the 2016 National Budget.
He said the bond was structured in such a way that it would be redeemed in three equal instalments of $ 416 million in July 2025, July 2026 and July 2027.
Mr Mvunga further announced to the August House that a similar sinking fund had already been established for the repayment of the other two sovereign Eurobonds through the issuance of Statutory Instrument No. 75 of 2015 which was gazetted on October 12, 2015.
“The setting up of the sinking funds does not, however, preclude other options such as refinancing,” Mr Mvunga said.