adminto take up a 30 percent stake in the bank to underwrite significant projects in the country.
Chief executive Mr Charles Chikaura said in the IDBZ annual report that negotiations are already in progress and could be concluded before the end of the year.
While the bank is pursuing a foreign partner to strengthen its shareholder base, they have also engaged existing foreign and regional shareholders for possible fresh capital injection.
“The group will continue to engage its foreign institutional shareholders with a view to accessing some tangible support and possible lines of credit which are critical if the group is to meaningfully play its developmental role.”
It is understood China Development Bank is interested in taking up a stake in the country’s infrastructure bank.
The Government owns 85 percent of the bank while the Reserve Bank of Zimbabwe has a 14 percent stake.
The new investor is expected to take up about 30 percent stake in the bank diluting the Government’s shareholding to just above 50 percent.
Other shareholders include Zimre Holdings Limited, Fidelity Life, African Development Bank, German Investment & Development Company, Netherlands Development Finance Company and the European Investment Bank sharing just less than 1 percent.
Since its formation in 2005 through the amendment of the Zimbabwe Development Bank Act, IDBZ has operated without adequate capitalisation to underwrite significant projects.
The only meaningful support enjoyed by the bank since its inception came from Government which, as the principal shareholder, availed additional injection of equity and lines of credit.
Government has over the past two years injected US$11 million into IDBZ to enable the institution to effectively undertake its role of championing infrastructure development.
IDBZ chairman, who is also the Secretary for Finance, Mr Willard Manungo said the bank will continue to court both regional and international development finance institutions to lure them into taking up
equity in the bank to broaden the shareholder base and sources of funding.
“The new investor will bring in the required capacity for the bank to square up to its mandate of investing in the rehabilitation and maintenance of existing infrastructure, at the same time availing new infrastructure for an economy poised to grow rapidly,” said Mr Manungo.
Mr Chikaura said while equity injection is welcome, its impact on the bank’s financial position will be minimal on the back of negative equity position of the institution arising from the legacy foreign debt standing at US$36,7 million as at December last year.
He said it was imperative that the foreign debt problem was resolved as a matter of urgency for the bank to realise its full potential. Government is the guarantor to the foreign debt legacy.
IDBZ has been involved in a number of infrastructural development projects in the country valued at over US$100 million.
Some of the projects include rehabilitation of power stations, road construction, water and sewer projects, dam construction, housing and information and communication technology projects.
Zimbabwe needs about US$20 billion to fix and modernise its infrastructure with US$12 billion going towards maintenance only.
Online Reporter