The Sunday Mail
Africa Moyo —
THE Infrastructure Development Bank of Zimbabwe has raised US$53 million of the targeted US$89 million for 2016, indicating low investor appetite for long-term paper.
Part of the funds have been channelled to housing in Harare and Masvingo; Tokwe-Mukorsi Dam; and Zimbabwe Power Company projects in Kariba and Hwange.
IDBZ chief executive officer Mr Thomas Zondo-Sakala said last week that of the US$53 million raised, US$22,5 million was via infrastructure bonds, while the other US$30,5 million came from liquidating Government Treasury Bills.
The bank is still in the market for a US$5,8 million housing bond to deliver 2 135 serviced residential stands in Matabeleland North. Mr Zondo-Sakala said another housing project, which requires an estimated US$10,7 million, has “not progressed quickly enough” to make it into the November bond issue.
“However, the project is at advanced stages of preparation and the bank is expecting to issue another tranche of the Housing Bond in the first quarter of 2017 to finance project implementation,” he said.
Challenging macro-economic conditions, characterised by a deteriorating trading balance position and widening budget deficit, have resulted in tightening liquidity conditions and difficulties in meeting external payments.
As a result, investors prefer short-term investments. IDBZ — whose emphasis remains on structuring bankable debt instruments that increase both market confidence and enhance the ability to raise funds — has received support from institutional investors.
IDBZ, a statutory body established through an Act of Parliament in 2005, has been contributing towards the development of a robust capital market while facilitating implementation of critical infrastructure projects through issuance of debt instruments.
To hedge itself from weaknesses associated with relying on traditional project-based fundraising, the bank is changing tact by scaling up its balance sheet and partnering other development finance institutions as part of the IDBZ’s medium-term strategy (2016 to 2018).
It is hoped that increasing collaboration with international development finance institutions will give access external lines of credit, syndicated loans on specific projects, credit guarantees in support of IDBZ’s debt issuances and technical assistance.
Said Mr Sakala: “The bank will also escalate efforts to utilise public-private partnerships as a funding model for infrastructure projects. PPPs are emerging as a major source of financing for infrastructure development on the African continent and internationally, and recent efforts by Government to develop the policy and regulatory framework for PPPs is designed to increase the participation of the private sector in infrastructure investment.”
It is envisaged that in the long-term, the IDBZ will be able to co-finance projects with other institutional investors.
