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THE Industrial Development Corporation of Zimbabwe is seeking seed capital to revive its development financing role, targeted at supporting value addition and beneficiation.
IDC made a US$100 million bid in the 2014 National Budget but could not get the allocation due to tight fiscal space, general manager Mr Mike Ndudzo said yesterday.
IDC is a wholly State-owned entity mandated to spearhead industrialisation in strategic sectors.
Its role is to add value through industrial processes and capital formation (foreign direct investment) to create wealth, employment and industrial development in the country.
Some of the companies that IDC has interest in include Chemplex, Zimglass, Olivine Industries, Amtec, Surface Investment and Willowvale Mazda Motor Industries.
“’The US$100 million bid made in the Budget was for the purposes of resuscitating the development financing role provided in the Act,” said Mr Ndudzo.
“This was meant as loan and equity support for beneficiation and value addition projects from the investing public and was seed money to start the function, to be supported by foreign direct investment and local and offshore bonds and lines of credit.”
Mr Ndudzo said while IDC was considering raising capital through disposing some of its assets, the environment and financial state of some of its investment was not conducive.
“The largest investments are in need of refurbishment capital and are set for dilution, so no money for IDC will be raised,” said Mr Ndudzo. “The smaller to medium sized up and running investments earmarked for disposals are not owned 100 percent in all cases and require extensive negotiations with current partners and new investors but are not of any material value.” Mr Ndudzo said while the role of IDC was to establish new industries, its development finance role was side stepped by the creation of SEDCO for small to medium enterprises, the Zimbabwe Mining Development Corporation and Zimbabwe Development Bank, now Infrastructure Development Bank of Zimbabwe.
IDC’s tenure in any investment depends on the circumstances of each. Some are rescue cases, some are bilateral supported by joint ventures and some are springboards for future investment and growth. Other investments are not very profitable commercially, but economically and strategically very important anchors of the economy.
With funding available, IDC intends to venture into value adding projects such as batteries from lithium, catalytic converters from platinum, stitched leather for export to luxury car manufacturers, drilling tools and wire from industrial diamonds among others.
Online Reporter