Old Mutual plans US$20m capex

LIVINGSTONE MARUFU

Old Mutual Zimbabwe, the country’s largest financial services group, is set to invest about US$20m in capital expenditure (capex) this year, as it accelerates a strategic push to modernise operations, expand digital capacity, and deepen its exposure to renewable energy and alternative assets.

The planned investment underscores a broader repositioning by the group to strengthen operational efficiency, defend market leadership, and secure long-term capital preservation in an increasingly competitive financial services landscape.

Old Mutual Zimbabwe chief executive officer Sam Matsekete said the group’s 2026 capex programme will be anchored on three key pillars, branch transformation, renewable energy adoption, and digital infrastructure expansion.

“Our capital expenditure for 2026 is probably about US$20m. Most of it is going to go into remodelling our physical channels,” Matsekete told Business Times.

“But we are also replacing our energy resources with renewable plants, particularly solar, for our own operations and premises. Then we are also directing capital expenditure into technology because we still have significant investment required in our digital transformation journey.”

The investment marks a continuation of Old Mutual’s long-term strategy to shift away from traditional infrastructure-heavy models towards a more technology-driven and sustainability-oriented operating framework.

A significant portion of the capex will go towards modernising physical branches, improving customer experience, and aligning distribution channels with evolving digital financial services trends.

At the same time, the group is intensifying investment in renewable energy solutions, particularly solar and hydro power, aimed at reducing operational costs and improving energy security across its portfolio.

Old Mutual has also identified infrastructure-linked and alternative investments as key drivers of long-term value creation.

These include ZWG-denominated unit trusts, money market instruments, equity funds, property development, and private equity, forming a diversified investment approach designed to balance risk and return.

The group’s ZWG Money Market Fund, which offers short-term interest-bearing securities, has already recorded yields of about 1.31% in January 2026, reflecting stable returns in the domestic money market segment.

Equity funds remain targeted at medium- to high-risk investors seeking capital appreciation through exposure to the Zimbabwe Stock Exchange, while alternative investments continue to expand into real estate and hospitality-linked assets, including student accommodation developments.

A central feature of Old Mutual’s investment strategy is its growing commitment to renewable energy financing.

The group launched the Renewable Energy Fund in 2024, which has since become a flagship vehicle for mobilising long-term capital into clean energy infrastructure.

The fund has already raised around US$18m and is engaging policymakers and regulators to expand its capital base and accelerate project implementation.

Structured as a blended finance mechanism, the fund pools resources from government, development finance institutions, multilateral partners, and private investors, with the objective of de-risking renewable energy projects and crowding in institutional capital at scale.

The initiative is anchored by the Government of Zimbabwe, the United Nations Development Programme (UNDP), the UN Capital Development Fund (UNCDF), and Old Mutual Zimbabwe.

Matsekete said the model represents a deliberate effort to unlock scalable green financing in a market where long-term capital has traditionally been constrained.

“This fund is a deliberate effort to aggregate and channel capital into renewable energy projects at scale,” he said.

“We have always invested in renewables, but this vehicle gives significantly more traction to that effort.”

The fund’s long-term target is to raise US$100m over three years, although its progress is increasingly linked to the introduction of supportive policy measures, including prescribed asset status and clearer regulatory frameworks to attract institutional investors.

Zimbabwe’s blended finance model is also beginning to attract regional and international attention, with at least three countries reportedly studying its structure for possible replication in their own renewable energy financing frameworks.

Old Mutual’s strong financial performance has provided a solid foundation for its expansion strategy.

For the year ended 2025, the group reported a 43% increase in profit after tax to US$40.2 million, up from US$28.1m in 2024, while revenue grew 29% to US$194.8m, compared to US$151.1m in the prior year.