THE Infrastructure Development Bank of Zimbabwe (IDBZ) has raised its Project Preparation and Development Fund (PPDF) to US$5 million to facilitate development of bankable projects to be presented to investors.
The fund was launched in 2016 at US$2,5 million.
The development bank said the unavailability of bankable projects is the major obstacle to infrastructure investment.
This has made it difficult for the country to raise the US$14,3 billion required to improve its infrastructure in water and sanitation, energy, transport as well as ICT.
IDBZ resource mobilisation manager Willing Zvirevo, in a 2016 financial results briefing, last week said the fund would look into all aspects that make a project ready for financing and implementation.
“The PPDF will be a revolving facility whose costs are recovered at financial close and ploughed back into the fund to support other projects.”
Zvirevo said the bank had a focused approach to discharging its mandate and had put in place a clear framework for identifying and measuring activities, performance and developmental impacts.
In its financial results for the period, IDBZ’s total assets grew by 22 percent to US$159,94 million from US$130,69 million recorded in the previous year.
This was due to a capital injection of US$23 million from shareholders, while the Zimbabwe Asset Management Company took over non-performing loans worth US$1,8 million.
IDBZ also experienced a 10 percent growth in revenue to US$7,43 million from the previous year’s US$6,73 million due to an increased presence in money markets and growth in long-term infrastructure business.
CEO Thomas Sakala said, ultimately, the success depended hugely on the country’s re-engagement process with multilateral lenders.
On its part, the bank raised US$22,5 million, of which US$19,3 million went towards the Kariba South Power Station project (KSPS) while US$3,2 million was put up for housing.
“The KSPS project, which will produce an additional 300MW, is still under implementation,” said Sakala.
“On the housing side, 357 residential stands were delivered in New Marimba and 704 stands in Clipsham, Masvingo.”
The bank is targeting to deliver
20 000 stands by 2018 as part of efforts to contribute to the national target of 1,25 million stands.
Under ZimAsset, Government is targeting 330 000 housing units by 2018. However, it will only deliver 25 000 units with the rest expected to come from other initiatives.
The country’s housing backlog is currently estimated at 1,25 million, with the City of Harare alone standing at about 200 000 in 2015.
IDBZ had also done project management on Public Sector Investment Programme (PSIP) disbursements of just below US$40 million.
The bank still has a pipeline of 15 projects in Energy (3), Transport (3), Water and Sanitation (3) as well as housing (6) which require project preparation financing of US$4,9 million.
“In energy, we have the Tokwe-Mukorsi mini-hydro power station, which is expected to produce 15MW at a cost of US$35 million,” said Sakala.
“A preferred investor has already been identified and civil works for the powerhouse are already underway.”
“Other projects which will have a total output of 5MW are Solgas (2.5MW) at US$7,2 million and the Osborne Dam mini-hydro power station at a cost of US$6,63 million.
“Preparations for the two projects are at advanced stages.”
The bank also has other projects at various stages of development, including the Beitbridge-Harare highway.
“Our engagements with other DFIs, such as DBSA, are continuous,” Sakala said.
“We will bring them in on some of the projects that we have a mandate to work on.
“There is still a gap to fund the Harare-Chirundu Road.
“We still have a number of roads which the Ministry of Transport has mandated us to undertake such as Harare-Nyamapanda, Beitbridge-Bulawayo, Victoria Falls road and bridge.”
The bank said it would aim to adequately resource projects in the development pipeline that reach bankability and also escalate bond issue and the use of Public Private Partnerships.
In its 2016 financial results, the bank’s revenue for the year increased by 10 percent to US$7,43 million from US$6,73 million in the prior year, driven by increased money market activity and growth in long-term infrastructure business, composed of bonds and property development.
Total expenses decreased 25 percent to US$7,61 million, fromUS$10,14 million following US$2,3 million retrenchment costs incurred in 2015.
Finance director Cannisious Gambanga said the bank is now reaping the benefits of the rationalisation exercise.
The bank, however, incurred a loss of US$1,3 million from a loss of US$4 million in the prior year.
Total liabilities increased to US$111,27 million from US$102,62 million in the prior year, as a result of a US$22,5 million growth in bonds which were raised and pre-sales revenue on housing stands.
During the period, bonds increased 22 percent to US$56,87 million from US$46,63 million in the prior year on the back of bonds in issue of US$50,5 million and Government funds of US$6,4 million for PSIP projects.