adminGolden Sibanda : Senior Business Reporter
THE Infrastructure Development Bank of Zimbabwe says it has developed a roadmap to achieve a capitalisation level of $250 million by 2018. The bank said its long-term strategy is to become self-financing, leveraging its balance sheet to raise lines of credit, quasi-equity capital and medium to long-term loans for investment in priority infrastructure projects.“Pursuant to this, the bank will seek assistance in the form of advocacy from the Reserve Bank of Zimbabwe and the Ministry of Finance and Economic Development in engaging the potential investors,” the bank said.
IDBZ said it will engage other development finance institutions; especially in Brazil, Russia, China and South Africa for the funding it needs for capitalisation in order to support priority infrastructure projects.
Further, the medium-term plan will also see the bank focusing on trade finance business activities in the value chain of the infrastructure sectors.
IDBZ said that trade finance has short end gains and so the bank’s involvement is strategic and aimed at strengthening its balance sheet and creating revenue for self sustenance in the immediate future. Its activities will therefore be concentrated in energy, transport, water, sanitation, information, communication and technology and housing sectors.
The bank’s plans are contained in its medium-term strategy for 2016-2018. It said that its operations are currently guided by a Results Based Management Five Year Strategic Plan covering the period from 2014 to 2018.
But the bank said a review of the implementation of this strategic plan indicates a need to be more focused in order to achieve the intended objectives.
Previously, IDBZ has been involved in the business of long-term infrastructure, medium-term industrial finance and short-term commercial funding. This has largely been driven by its critical need for survival.
“Unfortunately, this has inevitably led to a dilution of focus on the core mandate of infrastructure development,” the bank said in its medium term plan.
The bank said in the first two years of the RBM plan (2014 /15), it was confronted by the twin legacies of inherited external debt and non-performing loans, which forced it to focus on short-term business activities.
“The first challenge has been successfully addressed following the transfer of the legacy debt to a special Government vehicle; Zimbabwe Asset Management Company while the second is now subject to intensified bank collection efforts on all non-performing loans,” IDBZ said.
In view of these developments and Government’s recent break through on the country’s external debt arrears repayment in Lima, Peru, IDBZ said the stage is now set for the bank to accelerate plans to seek support for the requisite long-term capital inflows for infrastructure projects.
IDBZ’s recapitalisation strategy and medium-term plan is intended to refocus its operations toward development of infrastructure with emphasis on energy, transport, water, sanitation, ICTs and housing informed by Government’s medium-term plan, Zim-Asset, the 10 point economic growth and the United Nations’ Sustainable Development Goals.
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