PHILLIMON MHLANGA
The Infrastructure Development Bank of Zimbabwe (IDBZ) will raise cash from its shareholders to scale up its projects as well as be able to lend to the private sector.
IDBZ chief executive officer, Thomas Zondo Sakala, said the bank would approach shareholders for funding but did not did not disclose the amount the bank would raise from shareholding through issuing additional shares.
“The implementation approach for the bank’s capitalisation will involve a rights offer to current shareholders in the first half of 2021 to raise liquid capital and give the bank capacity to scale up its project preparation activities and private sector lending operations, allocation of land assets to the IDBZ by government as a pragmatic strategy to fortify the bank’s balance sheet and staged equity offerings to new strategic partners as well as the establishment of thematic offshore funds structured around investment opportunities in export agriculture, mining and renewable energy,” Sakala said in a statement accompanying the bank’s financial results for the year to December 31, 2020.
He said the bank was pursuing a recapitalisation programme whose main objectives were to strengthen the bank’s balance sheet and funding capacity, facilitate access to long term funding suitable for infrastructure investments and ultimately, attract strategic partners that are aligned to the bank’s developmental mandate.
“The bank’s recapitalisation programme will be implemented in phases through a series of transactions to be undertaken over the next 3-5 years,” Sakala said.
Revenue for IDBZ grew 105% to ZWL$768m in the 12 months to December 31, 2020 from ZWL$375m in 2019 driven by property sales income as well as increase in interest income contributed by a 211% growth in loans and advances from the Elizabeth Park Housing (in Ruwa) and Sumben Phase 1 housing projects’ (in Harare) stand sale.
However, the bank made an operating loss amounting to ZWL$408m, a 90% decrease from prior year loss of ZWL$3.9bn.
Total assets declined 4% to ZWL$5.6bn in the reviewed period from ZWL$5.9bn in 2019.
