IDBZ raises $22m from infrastructure bonds

The Infrastructure Development Bank of Zimbabwe (IDBZ) last year raised about $22 million from infrastructure bonds floated to the investing public to fund various projects under preparation, the bank said.

Data released by the State- owned institution — whose mandate is infrastructure development — to local media indicated that insurance companies and pension funds had been main subscribers snapping up the infrastructure bonds which attract an interest of nine percent per year.

The bonds — aimed at providing capital for the upgrading of Zimbabwe’s power generation plants and housing facilities — come after the bank issued its maiden $5 million housing bond in 2015 through private placement and an additional $15 million bond during this second half of 2016.

“The bank will be issuing additional tranches of the housing bond of up to $15 million in 2016 to fund various projects currently under preparation once they are ready for implementation,” the group said in a stakeholder update released recently.

IDBZ also said it had received the thumbs up from Treasury to issue bonds worth over $100 million in the next five years.

“The bank has authority from the ministry of Finance to issue housing bonds of up to $100 million over a five-year period and the bond issuances will be underpinned by bankable projects that demonstrate off take capacity and financial viability,” the bank said.

IDBZ’s $5 million bond issued in 2015 was fully subscribed, and has a five-year tenor carrying a fixed coupon of 9,5 percent per annum. Proceeds of this bond are financing development of two housing projects; New Marimba Park in Harare and Clipsham Views in Masvingo, where servicing is in progress.

The projects collectively deliver 1 042 serviced residential stands and the instrument has had one coupon payment settled in June. IDBZ is presently developing 338 high-to-medium density residential stands under its New Marimba housing project. It is estimated the exercise will cost plus or minus $2 million.

Both the 300sqm stands and 510sqm stands, for which deposits ranged from $2 500 and $4 400, would be paid for over a period of 10 years and the cost will attract interest of 10 percent per year.

The project is part of IDBZ’s contribution towards closing the country’s over 1,5 million housing backlog. IDBZ recently came up with a draft housing policy to its guide sector interventions aimed at easing housing shortage in the next two years.

The draft policy outlines plans to acquire land for housing development and funding mechanisms for the delivery of affordable units. Daily News