US$193 million deal kicks off healthcare provision phase 3
Government has signed a US$193,3 million hospital and health centre construction financing deal with South African bank ABSA and Standard Bank Limited Zimbabwe.
The financing deal kicks off phase three of health care centre provision in all ten provinces of the country which began in 2019. In this phase a total of 5 district hospitals with a bed capacity of 60 and 22 health centres with a bed capacity of 20 will be constructed.
In a statement, the Minister of Finance and Economic Development, Hon. Prof. Mthuli Ncube said, “The Government of Zimbabwe is pleased announce that, Treasury, through the Zimbabwe Public Debt Management Office has successfully negotiated for a US$193.3 million sovereign loan facility from Standard Bank Limited (South Africa), ABSA and Standard Bank Limited Zimbabwe, for the financing of Phase 3 of the Project, for the full turnkey construction of 5*60-bed District Hospitals and 22 by 20-bed Health Centres across the country’s ten provinces.”
According to the financing package, the programme is expected to commence in June 2023 after reaching full financial closure of the external sovereign loan facility, including finalisation of the legal and environmental and social due diligence by the lenders.
According to the minister, healthcare facilities are pivotal to the delivery of local healthcare through provision of affordable, accessible and localised healthcare services in all the ten provinces throughout the country, while in turn, acting as a filter to reduce unnecessary hospital admissions, taking the pressure off new and existing District Hospitals, to allow them to focus on the most serious cases
“In addition, each facility will bring economic and social benefits, including new jobs for local Zimbabwean contractors, along with a total of 960 new healthcare beds once the whole project is completed,” he said.
The phase 3 project is expected to be completed within 3 years if Government manages to de-risk the project, which is a condition for the participating banks.
As a result, government has pledged to de-risk the project, through the use of US$35 million SDR Cash Cover, which was set aside in the 2023 National Budget, and will be deposited upfront into an Offshore SDR Escrow Account.
Additionally, US$2,5 million monthly deposits collected from royalties are to be ringfenced into an Offshore Debt Service Reserve Escrow Account, and engagement of ECIC to provide insurance cover will be done as part of the de-risking process.
Prof. Ncube added that, “This financing package is highly significant for Zimbabwe and the underlying Built to Care’ healthcare project is a key priority for Zimbabwe. In addition, this structured financing ushers in an exciting re-emergence of Zimbabwe on the international capital markets, for the delivery of quality healthcare infrastructure for the people of Zimbabwe.
“This project is a good example of the private sector partnering with Government to “improve quality of life, and improve life expectancy at birth from 61 years to 65 years,” in line with the National Development Strategy (NDS) 1 objective.”
He concluded that this is also in line with the Government’s Vision 2030 aspirations of “provision of an efficient, integrated and quality health care system with priority being given to preventive care at community and household levels.
-ebusinessweeklu
