IDBZ engages foreign advisers


THE Infrastructure Development Bank of Zimbabwe (IDBZ) has engaged South African financial advisers to secure $100 million for the funding of various infrastructure projects.


The funding is expected to be availed before year end.

In an interview with NewsDay, IDBZ chief executive officer Charles Chikaura said the funds would be for water, energy and transport projects.

He said the infrastructure bank had decided to look for funding from outside because there was high demand on the local market and the market was still not yet deep, especially for IDBZ which deals with large projects.

Chikaura said at the moment, he could not offer specifics with regard to the bonds as they were at preliminary stages.

“Certainly, we are hoping to get something in the last quarter of this year. As you are aware, Zimbabwe has been out of the international capital markets for quite some time. We are in a way re-introducing ourselves. It takes time for investors to warm up, especially investors who do not have enough information on markets,” Chikaura said.

“This is the reason why we thought of using financial advisers in that market who have knowledge and the requisite contacts in the market and understand the investor preferences. We think that will reduce the time.”

The IDBZ CEO said the engagement for the bond issues began a month ago and four South African financial advisers had been engaged.

However, he could not divulge names of the advisers as he said it could scuttle negotiations underway.

He said in the past when the bank was under sanctions and had an insolvent balance sheet, it could neither attract investors nor access funding.

IDBZ was removed from the sanctions list last year and the bank became solvent after the takeover of its debt by the Zimbabwe Asset Management Company.

Chikaura said for the $11,2 million that is required for repowering Harare Power Station, which is being done through a private placement, progress had been made and by next month, the required figure would have been raised.

He said the bank expected to receive $70 million from PTA Bank and African Development Bank for medium-term funding for agriculture, mining and industrial sectors of the economy.

Chikaura said discussions were ongoing with PTA, Industrial Development Corporation of South Africa, Development Bank of South Africa, Shelter Afrique and China Development Bank.

He said the development of infrastructure had been slow although successes had been recorded in housing projects.

Chikaura said funding remained the major challenge for infrastructure development as well as the absence of bankable projects as required by the financiers.