adminMartin Kadzere : Senior Business Reporter
THE Infrastructure Development Bank of Zimbabwe has established a fund aimed at developing early preparation stages of infrastructure projects from concept to bankability. Already, $2,5 million has been injected into the fund with the bank aiming to attain a level of $5 million early next year and eventually $10 million, CEO Mr Thomas Sakala said.He said the Project Preparation Development Fund, as it is known, was in response to the need to fund early stages of project preparation and development funding gap which, from empirical evidence, has been the major bottleneck to attracting investments.
“The absence of bankable feasibility studies confirming overall project viability partly explains the slow uptake of the mega deals concluded in the recent past by the country’s leadership,” he said, in reference to deals signed between China and Zimbabwe.
“Through the PPDF window, the bank will ensure that priority infrastructure projects or concepts are developed to bankability in a timely and transparent manner; and that these can then attract the right levels of investment for successful execution.”
Revolving in nature, the fund is expected to continue receiving additional financial support from stakeholders in the infrastructure value chain as well as recoupment of part of the early-stage preparation funding from successfully promoted projects where investment has been secured for implementation. Project promoters will be expected to make contributions of between 5-10 percent of project preparation costs.
Eligible projects to be considered for funding through the PPDF facility are those falling under the sectors such as energy, transport, water and sanitation, housing, information communication technology and tourism. The fund will also cater for economically viable development projects including those under the Community Share Owner Trusts.
The facility is expected to be launched on July 1, 2016 where detailed criteria for qualification will be availed.
“Given the significant strides the IDBZ has made towards realisation of its Medium Term Strategy, which anchors the fulfilment of its core mandate, the IDBZ is grateful for the continued support of Government as it leverages this support to mobilise additional resources required for deployment towards key enabling infrastructure for the growth and transformation of our economy and nation,” added Mr Sakala.
Presenting the 2016 National Budget in November last year, Finance and Economic Development Minister Patrick Chinamasa said most strategic projects in the ZimAsset have failed to attract investors due to lack of evidence on their bankability. He said due to lack of evidence on the bankability of the projects, there was low uptake.
Minister Chinamasa said a large number of projects in ZimAsset Strategic Plan did not have feasibility studies, and hence, provide very little information for Government and potential private sector investors to make sound investment decisions.
Online Reporter