Out of the US$1.25bn Eurobond issue,US$400m has been allocated for road construction in Zambia in a bid to boost connectivity in urban and rural areas.
According to the Deputy Minister for Finance, Christopher Mvunga, US $410.7m will be channeled towards road infrastructure improvement.
He noted that US $268m will go into domestic debt swap and clearance while US $40m will be used for maintaining canals and purchasing maritime equipment.
US $45.2m and US $20.3m of the Eurobond would be spent on developments in the education and health sectors while US $20m will be spent on water and sanitation projects.
Other allocations made include $45.2 million for citizens and youth empowerment and $21 million and $15 million for the agriculture sector and on-lending to state-owned enterprises.
Minister Mvunga noted that the funding has been earmarked as part of financing for the 2016 National Budget.
He further indicated that the repayment of the Eurobond would be done in three installments from July 2025, 2026 and July 2027.
In order to help the Government of Zambia be able to fully pay the loan, a sinking fund will be established in line with the requirements of the loans and guarantees authorization Act Cap 66 to collect money to be used for the repayment of bonds as they develop.
Similar sinking funds were established through the issuance of Statutory Instrument (SI) 75 of 2015 to help in the payments of the bonds given in 2013 and 2014.
The government move to boost road construction in Zambia is informed by the need to boost road infrastructure as a catalyst to spur economic growth.