THE Infrastructure Development Bank of Zimbabwe (IDBZ) says it is this year working with relevant government ministries to issue US$25 million for financing both new and current irrigation infrastructure.
IDBZ manager for infrastructure projects, Alex Mashonganyika, said the bonds would make up the bank’s intervention in the irrigation infrastructure space for the year.
The IWG is made up of different stakeholders in the irrigation field from both the government and private sectors.
The bonds would provide funding support to implementing agents in the irrigation value chain for both working capital and capital expenditure.
“Irrigation schemes that are working on export oriented production will be able to benefit from the US$ bonds because they can raise income in US$.
“For those that cannot do that we will be issuing the ZWL but …the interest will be inflation related as well as US$ linked so that at the end of the day there is no prejudice to those who are doing their trading in ZWL,” Mashonganyika said.
“We are trying to make sure that we get maximum participation from key stakeholders. The main purpose of the bond is to finance irrigation infrastructure, not only … new infrastructure but capacitating existing projects to make sure that rehabilitation is also done in a proper manner.
“It’s important to make sure that before you move forward you also make sure that what is there is being utilised at full capacity.”
He said the tenure would be 24 to 36 months.
“We are also looking at having the bonds guaranteed by the government of Zimbabwe. Issuing financial instruments requires sweeteners for the instruments to be marketable and attract off-takers.
“So, the guarantee from the government of Zimbabwe is a particular requirement we would require and maybe get prescribed asset status as well. So that investors will have the appetite to invest,” Mashonganyika said.
The IDBZ is a national development finance institution created through an Act of Parliament to spearhead infrastructure development and financing in Zimbabwe.
The bank fulfills its mandate through various interventions including: project preparation and packaging, mobilising project resources, project implementation monitoring, capacity building and knowledge sharing.
The IDBZ is also mandated by the government to monitor the implementation of public infrastructure projects funded under the Public Sector Investment Programme.
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