The Infrastructure Development Bank of Zimbabwe (IDBZ) reports that tight liquidity conditions are hindering the disbursement of substantial funds for critical infrastructure projects.
In the first half of 2024, the bank provided only US$1.75 million in financing across the infrastructure, irrigation development, tourism, and agriculture sectors.
CEO Zondo Sakala attributed the limited disbursement to liquidity constraints but noted that two projects, valued at US$2.055 million, had been successfully developed and approved for funding. These include the Hatfield Cluster Housing project (US$1.055 million) and Marlborough Residential Apartments (US$1 million). More projects are anticipated to reach bankability by year-end.
IDBZ, a government-owned institution, focuses on long- and medium-term funding for essential infrastructure projects in transportation, housing, energy, ICT, water, and sanitation. Sakala highlighted that the bank raised US$2.56 million for project implementation in the first half of the year, with US$2.03 million directed to the Hatfield and Marlborough housing projects and Bulawayo Students Accommodation Complex.
The bank’s loan book grew to US$8.5 million from US$7.4 million, primarily supporting private sector operations. Sakala also mentioned that a government capital injection of ZiG 6 billion (US$2.4 million) was significantly devalued by rapid exchange rate depreciation, resulting in only US$0.18 million.
IDBZ is exploring alternative capitalization strategies, such as the transfer of land assets, mining claims, and regular capital injections, to ensure effective project funding. The bank recorded a pre-tax operating loss of ZiG64.9 million, compared to ZiG44.9 million in the same period last year. Asset value also declined by 21%, largely due to adverse exchange rate movements.
However, Sakala noted improved liquidity and revenue generation through private sector lending and increased sales of housing units.
He expects this trend to continue into the second half of the year, with proceeds from sales further enhancing the bank’s liquidity and performance.
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