Published by the government of Zimbabwe
23 November 2009
Harare — THE Industrial Development Corporation (Zimbabwe) has agreed on terms with the Industrial Development Corporation of South Africa to finance existing and new projects in Zimbabwe.
IDC general manager Mr Mike Ndudzo said IDC SA has however, indicated that before the funds were released, there should be an investment protection agreement between Zimbabwe and South Africa.
And in the event of delays in signing the investment protection agreement between the two countries, IDC and IDC SA would enter into bilateral agreements that cover the two entities.
"We have agreed on terms of credit lines to recapitalise our existing operations but this can only be possible once there is a protection agreement between Zimbabwe and South Africa or we will either have a specific bilateral agreement covering the two entities.
"In the meantime, we are preparing a Memorandum of Understanding on the bilateral credit framework," said Mr Ndudzo.
There are a number of projects that the IDC South Africa is ready to finance once the investment protection agreement is signed between Zimbabwe and its southern neighbour.
South Africa and Zimbabwe have for several years been in talks over a Bilateral Investment Protection and Promotion Agreement that would pave way for South African investment in the country.
The South Africans are keen to ensure that the BIPPA protects their properties in the country.
However, the agreement which was supposed to have been signed last year has been stalled by a series of events including elections in both countries and Clause 11 of BIPPA, which deals with the issue of land.
IDC with a capital base of approximately US$187 million has failed to recapitalise some of its subsidiaries, which need fresh capital of at least US$400 million.
Currently, IDC has over 30 subsidiaries and associate companies in the chemical, clothing and textiles, mineral processing, motor and transport, light and heavy engineering, agro processing and electronics.
Mr Ndudzo however pointed out that even in the absence of bilateral protocols on investments; the institutions are already jointly conducting feasibility studies on some projects that require recapitalisation.
IDC subsidiary, Chemplex Corporation and a fertilizer manufacturing company owned by IDC SA have signed an agreement to exploit phosphate in Dorowa.
"Once we have the investment protection agreements in place, we will then determine the investment needed."
South African businesses and IDC in particular are keen to do business with Zimbabwe, which is their country's biggest trading partner within the region.
Apart from exploring some opportunities with IDC Zimbabwe, the SA state-owned company, with a capital base of approximately R77 billion is also looking at financing local projects in sectors including mining and energy.
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