NewZimbabwe.com has invited Mr. Vengai Madzima, the Senior Partner at Madzima Chidyausiku Museta Legal Practitioners (MCM Legal) to discuss with us legal issues that affect Zimbabweans living in the diaspora. The discussions are of a general nature and those seeking specific legal advice should contact their lawyer.
Welcome back Mr. Madzima. You spoke on sustainable infrastructure development at the CEO Africa Annual Roundtable in Victoria Falls. What is your position on sustainable infrastructure development in the African context, considering that Africa is a low global contributor to world pollution?
Thank you
As a point of correction, I spoke on legal considerations for unlocking finances for sustainable infrastructure development. My focus was really on the different mechanisms available to unlock finance for funding infrastructure projects in Zimbabwe, the continent and around the world.
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To your question, sustainable development is a global reality despite various individual contrary views on whether it is necessary or fair. There is a plethora of legislation and policy entrenched in financing institutions that fund global development projects. They (the financial institutions) have, as a prerequisite, the condition that the projects be conscious of ESG's, being environmental, social impact and governance considerations.
A debate on its necessity, especially as 54 separate African countries, is in my view, an uphill task and the logical thing will be for each to benefit from the funds available and develop the individual countries for the collective benefit
Let's then start with the continental position. What legal and financial instruments are available for infrastructure development that is sustainable?
VM: We have a number of funds that promote infrastructure development that are premised on sustainability by taking into consideration the environment and social impacts. An example will be Sustainable Energy Fund for Africa (SEFA), Green Climate Fund and even the African Development Bank also prescribes infrastructure projects to establish sustainability.
This is not just a continental requirement, even when unlocking global international finance, institutions are guided by the Equator Principles and International Finance Corporation performance standards, which have at their core, requirements for the financing institution to satisfy itself that the projects being funded are environmentally sustainable.
If we were to also look East, being global financial giants, China in 2021 also implemented the Green Development Guidelines for Overseas Investment and Cooperation and is also considering sustainability in its funding mechanisms.
To the second part of your question on sustainable infrastructure development, on the continent, we are guided by the African Union Agenda 2063 being a blueprint of Africa's structural transformation.
Further, we also have the Programme for Infrastructure Development (PIDA) with a priority action plan or mandate to give preference to cross-border projects in energy, water and transport, among other things. These projects, as you can see at face value, have serious environmental and social considerations.
Then there is the African Free Trade Organisation, which makes sustainable infrastructure a treaty-based obligation. The harmonisation of the continental laws and individual state laws is now a legal and economic necessity.
Before discussing what the position in Zimbabwe is, what are the things investors generally consider when investing in infrastructure development?
VM: Well like in every investment transaction, the investor is concerned mainly with whether he or she will attain enforceable rights, whether or not there are predictable timelines within the project and key to all, whether the project has taken into consideration and mitigated against any potential environmental and social impact, allowing maximum protection to the potentially affected.
What is then our Zimbabwe position in terms of sustainable infrastructure development?
I will reiterate what I said at the CEO roundtable conference, my view is that our laws in terms of sustainable infrastructure development are well developed and competitive on the continent.
Sustainability is a constitutional, legislative and policy question in Zimbabwe as it is covered by all pillars of the prescriptive and guidance laws in our country.
Our weakness is that the laws are fragmented and found in various statutes that address the different areas where sustainability is a question. Although the Environmental Management Act is the overarching legislation, aligning with the prescriptive terms of our constitution, other legislation like your Water Act, Electricity Act, ZIDA and many other have sustainability considerations.
The National Development Strategy 2, commencing in 2026, has put sustainable development goals at the core of its policy.
Countries like Kenya have managed to amalgamate these laws into a single reference legislation, making them more attractive to sustainable infrastructure development financing. Although we have a National Climate Policy, our National Climate Management Bill, which will harmonise these laws, is going through the legislative processes with the objective of having a national reference point.
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Would you then advise that ESGs be part of all sustainable infrastructure development plans for investors? If yes, what would your reasons be?
VM: With the risk of sounding like a broken record, international finance can mostly be accessed by companies that can show project environmental and social impacts, including mitigation and remediation options.
It therefore widens the areas where the developer can access development finance.
Inclusion of ESG considerations future proofs projects because most African countries, with Zimbabwe included, are incorporating or perfecting the laws that deal with climate issues.
Thank you, Mr Madzima. We have to end here because of our time.
Thank you.
You can contact Vengai Madzima on vengai@mcmlegal.co.zw or at www.mcmlegal.co.zw
