The African Development Bank (AfDB) is working on a US$100 million facility to support Old Mutual Zimbabwe and its banking unit, Central Africa Building Society (CABS), environmental, social and governance programmes.
One of the AfDB's mandates is to promote the social progress and sustainable economic development of member countries.
The bank is currently playing a key facilitatory role in Zimbabwe's debt resolution process while being one of the main creditors.
The bank, this week pledged to use its influence to arrange for financial resources needed by Zimbabwe to clear its external debt arrears in order to reopen access to affordable financing from multilateral lenders.
Suspended borrowing from international financial institutions has weighed on growth and development in Zimbabwe due to the lack of funding to support the private sector and key public sector initiatives, including national budget obligations and infrastructure.
Dr Akinwumi Adesina, president of AfDB and champion of Zimbabwe's arrears clearance and debt resolution process, speaking on the sidelines of the high-level structured dialogue platform forum held in Harare on Monday, said the bank would continue to strongly support Zimbabwe.
"The bank has provided US$55 million in lines of credit to Zimbabwe's private sector, and currently AfDB is working on a US$100 million facility for Old Mutual and CABS to enhance their ESG policies," he said.
Dr Adesina said AfDB has been working with NMBZ, CABS, and other private sector players while providing the Government with various funding facilities.
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NMBZ Bank in December last year secured a US$15 million Trade Finance Transaction Guarantee Facility from the AfDB, and the facility is a three-year unfunded transaction guarantee that will support local corporations and small and medium-sized enterprises (SMEs) in Zimbabwe.
The facility may be renewed upon maturity, but this is subject to the bank's eligibility criteria, the client's needs, and performance.
In December 2023, the bank's board of directors approved a US$20 million trade finance line of credit to CABS. However, according to CABS' ESG policy, the bank is committed to maintaining a business model that incorporates considerations of environmental, social, and sustainability as well as corporate governance risks and opportunities.
The policy defines CABS' approach to environmental, social, and governance risks and how such risks feature in the lending, outsourcing, and contracting decisions made by CABS.
The depletion of natural resources and the threat of climate change have raised concerns about the environment and the potential financial impact on businesses.
As of December 31, 2023, the AfDB had 81 member countries, including 54 independent African countries and 27 non-African countries.
