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LUSAKA (Reuters) – Zambian has selected a unit of Rabo Bank of the Netherlands to fund its long term oil imports after financing negotiations collapsed with a South African bank, a senior official said.

Peter Mumba, the permanent secretary for the ministry of energy and water development, said the Zambia National Commercial Bank (ZNCB) had been selected to pay upfront for Zambia oil imports.

Mumba said the ZNBC, in which Rabo Bank owns a 49 percent stake with management control, was selected after talks with Stanbic Bank Zambia Ltd., a subsidiary of South Africa’s Standard Bank, collapsed in March when the two parties failed to agree conditions for a $1.2 billion oil financing deal.

“We have picked Zanaco Plc and immediately we are going into negotiations with them to complete the nitty-gritty issues,” Mumba told Reuters late on Wednesday, but he gave no further details.

The pan African government-owned PTA Bank, which has paid for Zambia’s two previous oil imports of 90,000 tonnes per shipment, will finance a third import of 90,000 tonnes in July before the ZNCB takes over future payments, the state ZNBC radio separately quoted Mumba saying.

Zambia was forced to float a fresh tender after the collapse of talks with Stanbic Bank.

Zambia has had no financier for its oil procurement since French oil major Total, which owns the country’s Indeni Oil Refinery on a 50-50 basis with the government, stopped paying for oil imports in July 2007, after differences with the government over pricing of petroleum products.

The government chose Kuwait’s International Petroleum Group (IPG) last November to supply nearly 1.5 million tonnes of crude oil for two years.

The first 90,000 tonnes shipment of crude oil worth $75 million was financed by the pan African government-owned PTA Bank, due to delays in concluding negotiations with Stanbic.

Zambia uses huge amounts of diesel to run its copper mines, the country’s economic lifeblood.

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