Harare — The Civil Aviation Authority of Zimbabwe has approached several financial institutions to negotiate funding for the construction of a new terminal and runway at the Victoria Falls Airport, with reports from South Africa indicating that Nedbank has put up US$38 million for the project.

CAAZ general manager Mr David Chawota last week confirmed that Nedbank was one of the four financial institutions that they had approached.

Mr Chawota said the five institutions were a mix of both local and foreign banks. Some local banks were teaming up with foreign banks because of the foreign currency requirement. Mr Chawota said they were keen to conclude the negotiations as soon as possible to enable construction to start by February next year. "This project is being undertaken with the 2010 World Cup in mind and so the airport should be ready before then. We are looking at 2009 at the latest. "Obviously, we will look at the bank that will give us terms that are acceptable to Government," he said.

According to the reports, Nedbank Capital, a division of Nedbank Group Limited, was supporting a bid by Ngezi Road Joint Venture to undertake the Victoria Falls airport project. Ngezi Road Joint Venture comprises construction companies Costain, Bitcon and Tarcon. The reports cited an undated document compiled by the joint venture's advisers, Zimlantic Export and Import (Private) Limited. Nedbank was said to be proposing two funding options for the airport project, a loan facility under which it would ring-fence the revenue from the project during the repayment period of between 10 and 20 years.

The other option was on a Build Operate and Transfer (BOT) basis under which the bank would operate the airport for an agreed time until the loan is fully repaid. Nedbank is understood to have directed its Zimbabwean subsidiary, MBCA Bank, to do the initial due diligence on the project.

It also directed both CAAZ and Costain to submit documents relating to the tenders to MBCA as per the bank's requirements. In a letter dated March 29, 2007 to CAAZ, Nedbank's Sphiwe Celemade is said to have indicated the bank's willingness to consider funding the airport project only if the financial institution's credit committee was satisfied "with political risk mitigants" in Zimbabwe. Zimlantic said Nedbank was cognisant of the fact that revenue generated during the football World Cup tournament in South Africa in 2010 would be able to reduce the repayment period by three to four years. The expansion of Victoria Falls Airport, which started in 2004, was stalled after CAAZ ran into financial problems because of escalating costs.

Victoria Falls resort town represents the face of tourism in Zimbabwe as it houses one of the Seven Wonders of the World and an enlarged airport is essential to cater for tourists who flock to the resort town on a daily basis. The national airline, Air Zimbabwe, offers regular flights to Victoria Falls, while South African Airways has direct flights from Johannesburg to the resort town. An expanded airport is also necessary in view of the recovery of the tourism sector as the country expects more flights and a tourist influx into the resort town.

Qatar Airways recently indicated its willingness to operate flights to the resort town but had to put its plans on hold as the airport was ill-equipped to handle the airline's wide-bodied aircraft.