IDBZ records ZiG64.9 million loss, Sakala outlines capitalization plans
The Infrastructure Development Bank of Zimbabwe (IDBZ) faced significant challenges during the first half to Juneb 30, 2024, as it recorded an operating loss and failed to capitalise due to Zim Dollar depreciation.
The Bank’s capitalisation efforts were hindered by the rapid depreciation of the local currency, and it recorded an operating loss before tax of ZiG64,9 million, up from ZiG44,9 million in the same period last year.
Chief Executive Officer Zondo Sakala expressed concern over the adverse impact of the exchange rate volatility on the bank’s capitalisation.
The Government had injected ZiG2,4 million, intended to be equivalent to US$1 million at the interbank exchange rate at the time of the National Budget approval. However, by the time the funds were released, the value had eroded to just US$0,18 million.
“This significant loss in value has underscored the need for more stable and sustainable capitalisation mechanisms,” said Sakala.
To address these challenges, the Bank is actively engaging its shareholders for additional capital. Sakala highlighted that the Bank is exploring alternative capitalisation initiatives, which include the transfer of valuable land assets, mining claims, regular liquid capital injections through the National Budget, and the issuance of Treasury Bills.
These measures are aimed at ensuring the Bank can effectively deliver on its mandate, despite the economic headwinds.
In terms of financial performance, the IDBZ reported a negative net revenue of ZiG3,7 million, an improvement from a negative ZiG19,9 million in the prior period.
This indicates a marginal recovery, although the Bank’s overall financial performance remains under pressure.
On a positive note, the Bank successfully developed and approved two projects worth ZiG27,9 million (US$2,055 million) to bankability during the first half of the year.
These projects include the Hatfield Cluster Housing and Marlborough Residential Apartments, both critical to Zimbabwe’s housing sector.
Furthermore, the Bank managed to raise ZiG34,8 million (US$2,56 million) towards project implementation. This included funding for the Hatfield Cluster Housing and Marlborough Residential Apartments, as well as the Bulawayo Students Accommodation Complex.
Despite tight liquidity in the market, the IDBZ disbursed ZiG23,8 million (US$1,75 million) to support clients in infrastructure, irrigation, tourism, and agriculture sectors.
Looking ahead, the Bank’s focus remains on securing additional capital and successfully steering more projects to bankability by the end of the year.
“Our commitment to infrastructure development is unwavering, and we continue to explore innovative solutions to navigate the challenging economic environment,” Sakala concluded.-ebsinessweekl
