The Eswatini government has clarified that the E182 million (US$10.4 million) loan secured from Exim Bank of India for the construction of the Data Recovery Site (DRS) in Siteki has not been cancelled. This clarification comes after Finance Minister Neal Rijkenberg's recent remarks in Parliament were interpreted to mean that the government had sought cancellation of the loan facility. According to the Ministry of Finance, the minister was referring to the cancellation of commitment fees being charged on the undisbursed portions of the loans.
The Ministry of Finance has stated that the loan arrangements provided for an initial one per cent disbursement to facilitate project development, which was disbursed for both projects. Exim Bank subsequently undertook the necessary project-development work, and the relevant documentation was submitted to facilitate further utilisation of the loans. The main issue raised by the government with Exim Bank was the commitment fees being charged on the portions of the loans that had not yet been drawn down.
Government engaged with Exim Bank India on the matter, and the bank has since confirmed that the commitment fees will be stopped. This means that the DRS financing remains available, although the extent to which the facility can be utilised and under what conditions remains subject to further engagement. The ministry said any consideration regarding the restructuring, extension, or alternative use of the financing would have to be discussed between the relevant government institutions and Exim Bank India.
The clarification raises questions about the status of the DRS project and the sequencing of the country's data-centre infrastructure. Questions had been raised about whether the government had determined, before securing the 2021 loan, that a primary data centre needed to be established before the DRS. The Finance Ministry's response did not directly address the reasons for the delay in implementing the DRS project or reconcile the different explanations surrounding the project.
The Ministry of Finance's clarification also did not disclose the amount of commitment fees that the government had paid before Exim Bank agreed to stop charging them. Questions had been raised about the financial implications to taxpayers of maintaining an undisbursed loan facility, including the total commitment fees paid to date. The ministry apologised for any misunderstanding arising from the minister's reference to 'cancellation'.
The latest clarification means that, contrary to earlier reports or interpretations, the government has not lost the Exim Bank financing. However, the continued availability of the facility leaves questions over when the funds will ultimately be utilised, whether the original project design will remain unchanged, and whether the financing can be applied to other data-centre infrastructure.
The Ministry of Finance said any future restructuring, extension, or other use of the financing would be subject to engagement between the relevant government institutions and Exim Bank India. The ministry also stated that if the minister's reference to 'cancellation' was understood to mean cancellation of the loans, it wishes to clarify that the reference was to the cancellation of the commitment fees being charged on the undisbursed portions of the loans.
Key points
- The Eswatini government has clarified that the E182m data centre loan from Exim Bank of India has not been cancelled.
- The commitment fees on the undisbursed portions of the loan have been stopped.
- The status of the DRS project and the sequencing of the country's data-centre infrastructure remain unclear.
