Published by the government of Zimbabwe
Perry Kaande
22 January 2008
Harare — A CHINESE investor is set to take up a significant stake in the Infrastructure Development Bank of Zimbabwe, Herald Business has learnt.
The size of the stake was not clear at Press time yesterday.
IDBZ chief executive Mr Charles Chikaura confirmed the negotiations, saying steps had already been taken to facilitate the transaction.
"I can, indeed, confirm that, consistent with Government's 'Look East Policy', the Infrastructure Development Bank of Zimbabwe is in discussions with a major Chinese bank interested in acquiring a significant shareholding in the bank.
"The necessary shareholder approvals for the investment have been sought and granted by the bank's existing shareholders," he said.
He added that the potential Chinese investor was currently exercising due diligence processes.
Although Mr Chikaura chose to be prudent over the portion at stake and the identity of the potential investor, Herald Business is informed that the China Development Bank (CBD) may be the suitor of IBDZ.
The Chinese financial institution is currently the biggest development bank in the world by portfolio, surpassing the World Bank and Asia Development Bank.
CDB has been a major player in long-term financing for key projects and supportive construction in infrastructure, and basic pillar industries.
It is one of the three policy banks of Chinese investment vehicle PRC, primarily responsible for raising funding for large infrastructure projects, including most of the funding for the Three Gorges Dam and Shanghai Pudong International Airport.
"Our expectation is that negotiations will be completed in the first half of this year, at which point an appropriate announcement will be made," said Mr Chikaura.
"In the meantime, confidential undertakings made by the bank to the Chinese investor preclude me from providing further information about the transaction."
IDBZ was launched by the Government of Zimbabwe in 2005 as a vehicle for the mobilisation of infrastructure development finance from both domestic and international sources.
The bank's mandate is to mobilise financial and technical resources of appropriate duration and cost, for public and private institutions involved in infrastructure development and to facilitate investment in infrastructure.
Long-term products include equity, bonds and guarantees, long-term loan and project finance. Short-term products include trade finance, lease finance, working capital, personal loans and treasury services.
IDBZ also actively promotes the participation of the private sector in infrastructure finance and development, through public-private partnership models, including joint venture, build-operate transfer (BOT) and other similar arrangements.
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