daglous masveta
Business Writer
A significant injection of up to US$50 million is set to bolster project development in Zimbabwe, thanks to a new partnership between the African Export-Import Bank (Afreximbank) and the Mutapa Investment Fund (MIF), Zimbabwe’s sovereign wealth fund.
The two entities have signed a Joint Project Preparation Facility (JPPF) Framework Agreement, designed to mobilise crucial preparatory funding for projects across key sectors of the Zimbabwean economy.
The agreement was signed by Mrs. Kanayo Awani, Executive Vice President of Intra-African Trade and Export Development, Afreximbank, and Dr. John Mangudya, CEO, Mutapa Investment Fund, and witnessed by Prof. Benedict Oramah, President & Chairman of the Board of Directors, Afreximbank Group, and Mr. Zitto Alfayo, Director, Project Preparation.
In a post on its linkedIn page, Afreximbank said this agreement will see the bank supporting MIF’s portfolio of investee companies in accessing the necessary funds to prepare projects for investment.
This means creating a pipeline of well-structured, “bankable” projects that are attractive to financiers, including both Afreximbank and MIF themselves, as well as other financial institutions.
“Through this partnership, Afreximbank will support MIF’s portfolio of investee companies to access project preparatory funding to create a robust pipeline of bankable projects that Afreximbank, MIF and other financial institutions can readily finance,” reads the statement in part.
The core focus of this partnership is the mobilisation of up to US$50 million specifically for project preparation. This funding will be instrumental in covering the costs associated with the early stages of project development, such as feasibility studies, technical assessments, environmental impact analyses, and legal and financial structuring. These crucial steps are often a barrier to attracting larger investments, and this new facility aims to overcome that hurdle.
The targeted sectors for this US$50 million investment are crucial for Zimbabwe’s economic development and align with the government’s Vision 2030 aspirations.
According to Afreximbank, the collaboration marks a bold step towards unlocking investments into the energy, transport and logistics, agro-processing, solid minerals development and beneficiation services, as well as industrial and allied sectors.
“These sectors are key enablers for economic growth, aligning with the government’s Vision 2030 aspirations.”
The agreement comes at a time Afreximbank has previously expressed concern over the lack of preparedness among Zimbabwean firms seeking funding from the bank.
In an interview during the SADC Industrialisation Week and Investment Conference that was held mid this year, Denya highlighted a significant gap in project development and execution.
“People want to do a lot of things but they have not thought through the production process, market access and the technology needed to undertake the project,” Denya said.
“We have had approaches where people said they want to do certain projects yet they lacked factual information as to why they want to do it, where it is going to be situated and what is needed,” Denya revealed. Such shortcomings, he argued, underscore a broader issue of project preparation and execution in the country. To bridge this gap, Afreximbank intends to deploy its project preparatory facility to assist potential beneficiaries in developing bankable proposals.
“There is a gap, not only to project preparation but even project execution,” Denya emphasised then.
daniel chigunwe
