Online Reporter
Nqobile Bhebhe Zimpapers Business Hub
THE City of Bulawayo is seeking approval to borrow US$13,1 million to finance critical infrastructure and sanitation projects as it moves to address a widening financing gap and improve service delivery.
The money will be channelled towards water and sanitation upgrades, road rehabilitation, ICT modernisation and renewable energy initiatives.
The proposal was contained in a report tabled during a full council meeting on Wednesday, where the local authority resolved to apply to the Ministry of Local Government and Public Works for borrowing powers in terms of Section 290 of the Urban Councils Act and Section 65 of the Public Finance Management Act.
According to the report presented by Financial Director Mr Tennyson Mpunzi, the funding will be directed towards priority capital projects aimed at restoring operational efficiency, enhancing revenue collection systems and supporting sustainable urban development.
The proposed allocation includes US$3,03 million for ICT equipment and accessories, US$2,48 million for water infrastructure, US$2,05 million for sanitation infrastructure, US$2 million for roads rehabilitation, US$2,65 million for equipment and vehicles, US$340 000 for building rehabilitation and US$600 000 for solar energy projects.
Council said the operating environment had remained relatively stable, characterised by subdued inflation and exchange-rate stability, but noted that local authorities continued to face significant challenges in financing infrastructure development due to ageing assets, limited internally generated resources and increasing service delivery demands.
“As a major urban local authority, council remains a key stakeholder in implementing the National Development Strategy 1 and National Development Strategy 2 through the provision of essential public services, rehabilitation of urban infrastructure and promotion of sustainable economic development,” reads part of the report.
The local authority said it was grappling with critical deficiencies affecting roads, water supply systems, sanitation infrastructure, ICT systems, public buildings and operational equipment.
Most of the city’s infrastructure has exceeded its economic lifespan, resulting in rising maintenance costs, frequent service disruptions and declining service delivery standards.
“Council’s approved 2026 capital budget remains inadequate to fully address the city’s growing infrastructure requirements. Consequently, council cannot finance the required capital interventions solely from internally generated resources without adversely affecting ongoing service delivery operations.
“In light of the foregoing, external capital financing has become necessary to bridge the infrastructure financing gap, restore operational efficiency, improve service delivery standards and support sustainable urban development,” the report reads.
The report further reads that several council-owned buildings have deteriorated significantly due to years of underinvestment in maintenance and rehabilitation.
Strategic facilities such as Revenue Hall and the Tower Block require urgent refurbishment to preserve public assets, improve occupational safety standards, enhance operational efficiency and improve access to services.
As part of its renewable energy drive, the city plans to install solar-powered street lighting systems and solarise traffic control infrastructure.
“The projects are expected to improve energy efficiency, reduce long-term electricity expenditure, enhance public safety through improved street lighting, reduce dependence on conventional energy sources and support council’s environmental sustainability objectives,” reads the report.
Council said current market conditions indicate that United States dollar-denominated loans attract interest rates averaging 16 percent per annum, with repayment periods ranging between 36 and 48 months.
Based on preliminary assessments, the proposed facility would require monthly repayments of approximately US$373 025 over a four-year period.
The city, however, indicated that it would continue exploring financing options with longer repayment periods and lower interest rates to improve affordability and debt sustainability.
In addition to conventional borrowing, council said it would pursue complementary financing models such as municipal bonds, concessional financing, blended finance mechanisms and public-private partnerships.
Preliminary discussions with financial institutions have reportedly yielded positive responses.
“Preliminary engagements with financial institutions indicated market appetite and institutional capacity to provide financing facilities to council, subject to statutory approvals, due diligence processes and final credit assessments,” said the council.
Council expressed confidence that the planned investments would improve operational efficiencies and strengthen its capacity to service the debt through enhanced revenue collection, reduced non-revenue water losses, lower equipment hiring costs and improved cost recovery systems.
The local authority further noted that the projects would contribute significantly to improved water and sanitation services, better road infrastructure, enhanced ICT systems, strengthened operational capacity and reduced operating costs, while advancing Bulawayo’s vision of becoming a smart and sustainable city.
On debt servicing, council noted the Reserve Bank of Zimbabwe’s position that all foreign currency-denominated loans remain repayable in the currency in which they were contracted, regardless of any future currency policy changes.
“Accordingly, any US dollar-denominated borrowing would continue to be serviced in US dollars throughout the term of the loan facility,” said the council.
