THE Infrastructure Development Bank of Zimbabwe (IDBZ) has re-engaged China Development Bank over a $30 million line of credit that it failed to draw down due to sanctions.
Report by Victoria Mtomba
IDBZ public relations executive Priscillah Mapuranga said the infrastructure bank signed a finance agreement with China in November 2011, but failed to access the funds as a result of economic sanctions placed on the bank then.
IDBZ was one of the government institutions recently removed from the sanctions list. Other entities that got the reprieve were ZB Bank and Agribank.
“The Bank was, however, unable to draw down due to issues relating to its listing on the United States of America OFAC Sanctions List. The removal of the IDBZ from the OFAC Sanctions List has seen the Bank re-engaging China Development Bank, with a view to commence the draw down on the facility,” she said.
Mapuranga said the funds would provide working capital and capital expenditure to industry and commerce including small to medium enterprises.
“Of the $30 million, $20 million will be for capital expenditure with a five-year tenure and the balance of $10 million will be for working capital, with a tenure of 12 months,” she said.
IDBZ chief executive officer Charles Chikaura in February this year told NewsDay that the bank would spend $200 million on key infrastructure projects beyond the capacity of the domestic capital market.
The infrastructure bank would source the funds from both local and foreign markets.
He said the liquidity crunch in 2012 hampered progress in terms of financing infrastructure projects.
Despite these challenges, last year the bank successfully issued its maiden Infrastructure Development Bond and raised $17,8 million for the prepaid metering project being implemented by Zesa from a total of $30 million.
The infrastructure bank in the first half of 2012 disbursed $100 million to 43 infrastructure projects in the energy, transport, water, sanitation, housing development and information communication technology sectors.
IDBZ is a statutory body established through an Act of Parliament in September 2005 following the amendment of the Zimbabwe Development Bank (ZDB) Act.
The amended ZDB Act broadened the original mandate to focus on long-term infrastructure finance and development.
The Bank has a broad-based shareholding, including local institutional investors and foreign development finance institutions.