Nelson Gahadza-Business Reporter
The Infrastructure Development Bank of Zimbabwe (IDBZ) says it has reviewed upwards its initial target to raise $2 billion through an infrastructure bond to $5 billion to cater for increased demand for project funding.
IDBZ was authorised by Treasury in 2020 to undertake an infrastructure bond programme to mobilise up to $2 billion to finance priority infrastructure projects.
Infrastructure development is a key element of Zimbabwe’s Vision 2030 by which time the country is expected to have attained Upper Middle-Income Society while leaving no one and place behind.
To date, the Government has spent over $2,5 billion on infrastructure projects including roads, which have achieved noticeable progress.
Progress has also been made within the housing sector, where the country has a backlog of 1,2 million units.
IDBZ said in a statement the targeted programme amount had since been increased to $5 billion in tandem with increased demand for funding.
“The bank has since signed an addendum to the trust deed to give effect to the increase in the programme amount from $2 billion to $5 billion,” it said.
The bank said to date, it has raised $1 034 576 000 under the bond programme and the funds raised have been used in the implementation of the Sumben Housing Project Phase 1, which is 99 percent complete.
Other projects that have been funded from the bond funds include the Waneka Phase III at 42 percent complete and the Elizabeth Park housing project that had been completed.
“A total of $330 million has been repaid for Elizabeth Park and Sumben Housing Projects,” the Bank said.
The bank said it is currently in the market to raise an additional $1 billion to finance the implementation of the Willsgrove housing project in Bulawayo.
Established in 2005, IDBZ, a government-owned development bank in Zimbabwe, mandated to fund long and medium term funding for key infrastructure projects, is governed by an Act of Parliament, the Infrastructure Development Bank of Zimbabwe Act (Chapter 24:14).
As of 2020, the Government was the largest shareholder in IDBZ, followed by the Reserve Bank of Zimbabwe.
Other shareholders are Fidelity Life Assurance Company of Zimbabwe Ltd, Finnish Fund for Industrial Cooperation Limited (Finnfund), African Development Bank (AfDB), German Investments & Development Company (DEG) and the European Investments Bank (EIB), in that order.
The bank was set up and charged with the mandate of infrastructure development and finance and it is regulated by the Minister of Finance and Economic Development.
The development financial institution is seeking to bolster its lending capacity, guided by the 2021-2023 Work Programme under the Theme: “Transforming and Retooling towards a DFI of Scale.
During the half year period to June 30, 2022, the Bank managed to raise an equivalent US$7,55 million towards project implementation.
Chief executive Mr Zondo Thomas Sakala said the funds were for the ongoing Bulawayo Students Accomodation Complex Project (BSAC) for US$3,8 million and Waneka Phase 3 Housing project for US$3,75 million.
“By the end of the half year, the Bank had commenced work on raising project implementation finance for the Rooiport Housing Project in Chivhu for US$5,8 million and Lupane Students Accommodation Complex project (LUSAC) for US$17,9 million,” he said.
Mr Sakala said the Bank is working towards building a robust pipeline of projects by continually adding new projects.