LIVINGSTONE MARUFU
The Ministry of Finance and Economic Development has granted prescribed asset (PA) status to 10 projects covering various sectors of the economy, Business Times can report.
Prescribed assets are bonds or securities issued by government or local government, quasi-government organisations or any other bond that may be accorded the PA status.
Insurance companies and pension funds are compelled to invest a certain threshold in PAs.
However, they have been struggling to meet the minimum required threshold.
IPEC pensions director, Cuthbert Munjoma said insurance and pensions industry players participate in projects of national importance through PAs stated in Section 26 of the Insurance Act [Chapter 24:07] and section 18 of the Pension and Provident Funds Act [Chapter 24:09].
“For the first half of this year, the Commission received applications and recommended conferment of prescribed asset status on the 10 instruments, which were approved by the Ministry of Finance and Economic Development,” Munjoma said.
The PAs applications that were approved by the Ministry of Finance include the Agricultural and Marketing Authority (AMA) Bills worth ZWL$20bn for the procurement of grain during the 2020/2021 agricultural season.
Others are Mangwana Opportunities Private Limited, which is looking to raise about ZWL$1.5bn while First Mutual’s $ZWL200m Micro Finance issue, would raise cash for on-lending to customers in the key sectors of the economy.
They have tenor of between six and 24 months, and semi-variable interest rates fluctuating between 30% and 60%.
There is also the Silo Food Industry ZWL$350m issuance targeted towards the manufacturing sector as working capital for processing of basic food commodities.
The issue has a tenor of 180 days, and interest of 35% per annum.
Also approved was the Sahwira Agriculture, which is looking to raise US$20m for capital expenditure and working capital financing for crop production.
The issue has a 270-day tenor and is offering interest of 8% per annum.
Murombedzi Solar Park, which is looking to raise US$8m to fund the Murombedzi Solar Energy Project, was also granted prescribed asset status. The issuance has a tenor of 10 years, attracting interest of 10% per annum payable semi-annually (US dollar indexed).CICADA is eyeing a ZWL$300m raise to finance the 2021 winter contract farming season. It has a 270-day tenor.
Interest is at 30% per annum with an incremental rate of +2 % annual coupon per 6% increase in the commodity price from the defined base price to price obtained at the point of sale.
