Energy, manufacturing sectors receive US$78m boost

Zimbabwe’s energy and manufacturing sectors yesterday received a major boost after three local banks and the Afreximbank separately penned deals totalling US$78 million that will see the bulk of the funds being fanned towards some identified segments of the economy.

The deals were signed at a ceremony held on the sidelines of the Intra-African Trade Fair (IATF2021) currently underway in Durban, South Africa that Zimbabwean President Mnangangwa is also in attendance.

Speaking after the signing ceremony, Denys Denya, Executive Vice President, Finance, Administration & Banking Services at the Afreximbank, said the facilities provided to the banks are meant to support the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) not only to import power but also for 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 Denya.

The facility to support power generation comes at a time the country 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 units as well as at South Hydro Power Station.

Although normal power generation has since been restored at some units in Hwange as well as at Kariba South Hydro Power Station, the country remains vulnerable to power shortages due to consistent plant breakdown at Hwange and water issues at Kariba.

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

Denya revealed that the facility to CABS is US$40 million while that of CBZ Holdings is 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, Cecil Ndoro, said the US$40 million facility will see the financial institution support power generation at ZETDC.

He said the key sectors of the economy which are agriculture, mining, manufacturing, and tourism depend 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 Ndoro.

Commenting on the significance of the loan facilities, trade development and promotion agency chief executive officer 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,” Majuru said.
Speaking soon after signing its US$28 million facility, CBZ chief executive officer 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,” 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 Beightbridge border post to a combined US$297 million.-eBusiness Weekly