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Zimbabwe Fund launched in Harare in May last year.
The bank released the funds after a breakfast meeting to discuss Zimbabwe and the Zimbabwe Fund during the AfDB annual meetings, which ended in Lisbon last Friday.
Finance Minister Tendai Biti signed the agreement on behalf of Zimbabwe while AfDB vice president (operations) Mr Aloysius Ordu signed for the bank.
The finance minister also told the media here that Zimbabwe’s economic growth rate had been reviewed upwards to 9,3 percent in 2011.
Economic Planning and Investment Promotion Minister Tapiwa Mashakada last Friday said the funding would go a long way in the development of infrastructure in.
“The AfDB took over the Zimbabwe Fund from the World Bank in May 2010 to support our economic recovery efforts,” he said. “Today (last Friday) we signed a US$72 million agreement that would primarily target our water and sanitation and energy development.”
Minister Mashakada said that US$30 million would be channelled towards rehabilitation and development of water and sanitation infrastructure.
He said another US$35 million would go towards energy development.
“We have set a target for the rehabilitation of the Hwange Thermal Power Station. As you know, the electrical power situation in Zimbabwe is critical. We would also work on critical infrastructure development projects and that would see some funds being channelled towards them,” he said.
Minister Mashakada said the funds would bolster other lines of credit extended to Zimbabwe over the years.
“The funds will bolster our development efforts, especially augmenting the funds we have already received from the PTA Bank and Afrexim Bank for our development efforts.”
According to the AfDB executive director Mr Ebrima Faal, the funds would go towards the Urgent Water Supply and Sanitation Rehabilitation Project with US$29,65 million going for rehabilitation works in Chitungwiza, Mutare, Masvingo, Kwekwe and Chegutu.
“The Emergency Power Infrastructure Rehabilitation Project (for Hwange Power Plant) would get US$35 million. Both projects are at the procurement level,” he said.
Mr Faal said the Zimbabwe Fund had received overwhelming response from at least six donors currently contributing to it.
“The fund has been well received because it was conceived, established and launched within one year. Discussions are ongoing with a number of other donors for possible contributions.”
But he said that more needed to be done in Zimbabwe as was being done in other African countries.
Mr Faal noted there was need to address the issue of arrears by Zimbabwe to the bank.
“You are aware that Zimbabwe has been in arrears to the bank for the last 10 years or so. As such, we find ourselves unable to fully participate in the recovery programmes for Zimbabwe,” he said.
“We stand ready to work with the Government to come up with an arrears clearing programme, after which we can be able to fully participate in the lending programmes as we do in regional member countries,” he said.
Meanwhile, Minister Biti told journalists here that Zimbabwe’s economic growth could exceed Government’s forecast of 9,3 percent.
He attributed the growth to strong commodity and food prices.
According to media reports in Lisbon, Government has revised upwards its forecast for mining sector growth in 2011 to 47 percent from 44 percent and overall growth forecasts are easily achievable.
“I genuinely believe the growth rate could be higher, mainly because of the strong performance of international commodity prices,” he said.
“”The food crisis is helping us as we are in a surplus position in grains.”
Consumer-focused industries such as telecommunications were also likely to see strong growth, he said.