THE government plans to raise $10,5 trillion for the new Infrastructural Development Bank of Zimbabwe (IDBZ)’s proposed authorised share capital in which it intends to hold 70% shares.
The money will be raised through direct allocations from the budget.
Government is consolidating its shareholding in the former Zimbabwe Development Bank (ZDB) after Fidelity, Zimre and other private investors pulled out.
Government had a 67% stake in the ZDB, which now forms the core of the new bank, but will have 70% in the new entity while the remaining 30% will be offered to local and offshore investors. The 30% is valued at $4,5 trillion.
“The government will raise $10,5 trillion for the proposed authorised share capital on a phased approach through direct allocations from the budget,” said the Minister of Finance, Herbert Murerwa, last week.
The new bank will have an authorised share capital of $15 trillion.
“Initially, the bank’s paid-up capital will be a trillion dollars,” Murerwa said.
He said the amount had already been catered for in the 2005 budget.
“The initial capital injection,” Murerwa said, “will trigger the mobilisation of additional resources from both the domestic and international capital markets.”
The IDBZ was officially launched on August 31, about five months late due to problems with funding although Murerwa said the delay was caused by “wider consultation”.
Murerwa said the bank would play a critical role in financing strategic infrastructural projects.
He said the bank, through the Public Private Partnership initiative, would also be expected to broker partnerships and come up with viable financing options for the private sector to participate in infrastructure investment.
Three new divisions will be added to the current ZDB structure, comprising housing, energy and amenities and utilities.
Murerwa said during the transformation phase, the ZDB would continue with its existing business activities, but as a separate division of the IDBZ.
An interim management board chaired by the secretary for Finance, Willard Manungo, has been put in place to manage the IDBZ.
Charles Chikaura has been appointed the chief executive officer with effect from September 1 for a period of five years.
Chikaura retired from the RBZ as deputy governor in August last year.
The board will include Andrew Bvumbe, the permanent secretary in the Ministry of Economic Development, engineer Ngoni Kudenga and Vincent Hungwe.