Home Business Afrexibank signs US$78m deals with three Zim banks

Afrexibank signs US$78m deals with three Zim banks

Afrexibank signs US$78m deals with three Zim banks

Afrexibank signs US$78m deals with three Zim banks

Three Zimbabwean banks yesterday signed separate funding deals valued at a combined US$78 million with African Export and Import Bank (Afreximbank) to support the energy and productive sectors of the economy.

The deals, inked between CBZ, ZB and CABS and Afreximbank were signed at a ceremony held on the sidelines of the Intra-African Trade Fair (IATF2021) currently underway in Durban, South Africa.

Speaking after the signing ceremony, Mr Denys Denya, executive vice president, finance, administration and banking services at the Afreximbank said the facilities agreed with the banks were meant to support the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), not only to import power but also enhance power generation.

“The electricity company (ZETDC) imports power from Mozambique, from Zambia and from South Africa, but most importantly we have given them the money to build capacity in terms of power generation.

“So, one of the facilities would be used to rehabilitate a power station in Mutare and also to import electrical metres to make recovery of electricity charges easier and to improve efficiencies at ZETDC,” said Mr Denya.

The facility to support power generation comes at a time Zimbabwe has been facing reduced power supplies with ZESA last month having introduced a 12-hour load-shedding regime to address power generation challenges at the Hwange Power Station as well as at the Kariba South hydro power plant.

Although normal power generation has since been restored at some units in Hwange and Kariba South stations, Zimbabwe remains vulnerable to power shortages due to consistent breakdowns at its major plants, Hwange, and the water issues at Kariba.

Mr Denya also said that some of the funds will also be used to support the steel sector in Zimbabwe and to build infrastructure to support the economy.

Mr Denya revealed that the facility to CABS was US$40 million while the one for CBZ Holdings was valued at US$28 million.

“It’s actually part of a large facility, ZB (Financial Holdings) participated in a US$188 million syndicated facility.”

According to ZB Financial Holdings’ head of corporate and investment banking, Emma Mugoni, the group got US$10 million to support electricity infrastructure in the country through ZETDC.

CABS deputy managing director, Mr Cecil Ndoro said the US$40 million facility would see the financial institution supporting power generation at ZETDC.

He said the key sectors of the economy, namely agriculture, mining, manufacturing, and tourism depended to a large extent on the availability of power.

“It is with this background that we are working towards capacitating key sectors of the economy in line with one of our pillars and strategy.

“So the event today marks that milestone, and we are hoping that we should be able to deploy the funds before the end of the year,” said Mr Ndoro.

Commenting on the significance of the loan facilities, trade development and promotion agency chief executive officer Mr Allan Majuru said the deals signed by the banks, as part of business engagements at the ongoing IATF2021 “are a strong confirmation of the potential to grow the contribution of services sector to national economy including the export sector which relies on the availability of power.”

“It is encouraging that banking institutions are taking a lead in exploring business relations that will feed into the manufacturing sector and in turn export growth. We are seeing potential for Zimbabwean businesses to do much more across the African continent,” Mr Majuru said.

Speaking soon after signing its US$28 million facility, CBZ chief executive officer Mr Blessing Mudavanhu said the facilities are of national importance.

“I must say it’s not just CBZ, but the entire country at large, you have always been assistants,” Mr Mudavanhu said.

The ongoing IATF2021, which is focused on promoting trade among African countries, is being sponsored by Afreximbank proving its growing importance to the African economy.

The Afreximbank has been very supportive of the Zimbabwe economy and in addition to facilities extended to the Reserve Bank of Zimbabwe, is also partly funding the new Beitbridge border post to a combined US$297 million.

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