Ashok Jain, an Indian businessman, approached the Zimbabwean government with a grand plan for a US$125 million ethanol plant. However, the Reserve Bank of Zimbabwe (RBZ) raised concerns about the feasibility of the project.
Jain, owner of NV Distilleries and Breweries, promised the plant would produce multiple products like poultry feed, fertilizer, and even generate power. In return, he requested a massive package of incentives, including free land, tax breaks on equipment, and a hefty line of credit.
While the Zimbabwe Investment Development Agency (ZIDA) initially approved the proposal, the RBZ Governor, John Mangudya, pointed out inconsistencies. The Indian government had no record of a US$165 million credit line for Zimbabwe, and Jain himself had pledged to invest nearly US$100 million personally.
Mangudya denied support for the project due to the lack of a confirmed Indian credit line.
He had agreed to inject US$97,850,000 over three years into the project with US$32,616,667 being personal funds, according to ZIDA’s letter of approval.
“Please kindly be advised that the Bank is not privy to the US$165 million line of credit that was extended to the Zimbabwean Government by the Indian Government,” reads Mangudya’s response.
“Under these circumstances, we would like to advise that without such support, we have no capacity to support the issuance of the required US$125 million Standby Letter of Credit.”
Separate reports allege Jain misused a photo with Zimbabwe’s President and his past legal troubles in India raise questions about his claims of high-ranking political influence.
