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Business Reporter
THE Infrastructure Development Bank of Zimbabwe (IDBZ) says it is aiming towards a recapitalisation base of up to $1 billion in the long term in a bid to meet infrastructure development needs of the economy.
Chief executive officer, Mr Thomas Zondo Sakala, said in a statement accompanying the bank’s financials for the period ended 31 December 2018, that the bank was driving at harnessing partnerships for infrastructure development in line with the country’s economic growth targets as espoused in the Transitional Stabilisation Programme (TSP) and the 2030 middle income vision.
Although the bank’s operations have been significantly affected by the challenging environment, particularly lack of liquidity in the Zimbabwean economy, he said the financing entity has adequate resources to continue in operation going forward.
“The bank is working on a recapitalisation programme in pursuit of its capitalisation targets of $500 million in the short term and $1 billion in the long term,” said Mr Sakala.
“Apart from scaling up the bank’s underwriting capacity, the recapitalisation is intended to bring on board strategic institutional investors who are aligned to the bank’s developmental mandate and who would facilitate access to long term capital suitable for infrastructure investment.”
He revealed that the bank has already raised a total of $127,3 million through the issuance of infrastructure development bonds since the bond issuance programme commenced in 2012.
During the reporting period, Mr Sakala said the bank raised $10,34 million towards project financing activities and more could have been mobilised were it not for delays due to procurement regulatory approvals for some projects.
The IDBZ is already seized with implementation of various infrastructure projects across the country such as the $16,8 million Kariba housing project, $14,2 million Bulawayo students accommodation project, $6,9 million Empumalanga housing scheme in Hwange, $34 million university hostels projects, water and sanitation, transport and institutional housing projects among others.
“The bank is also working on putting together an alternative investment platform, which seeks to pool capital resources from pension funds and other institutional investors for increased infrastructure investments,” said Mr Sakala.
In order to broaden funding sources and build the required critical mass, he said, the bank would accelerate its engagement with regional, continental and international development finance institutions and multilateral finance bodies to establish strategic partnerships.
These are expected to facilitate collaboration in preparation and financing of infrastructure projects.
Meanwhile, the entity’s revenue spiked 54 percent to $13 million from $8 million, driven by strong performance in net interest income, said Mr Sakala.
The asset base also grew by 212 percent to $590 million from $188 million spurred by receipt of additional capital of $152 million from Government and growth in Public Sector Investment Programme (PSIP) funds earmarked for public infrastructure projects.
This resulted in increases in cash and bank balances, as well as increases in money market placements.
These positive developments saw the bank recording a profit of $0,8 million as it exited from a loss making position of $581 000 in 2017.
Mr Sakala said the $152,9 million capital injection from Treasury in 2018 helped boost the entity’s income generation capacity.
Online Reporter