THE Agricultural Bank of Zimbabwe (Agribank) says it has been approached by Dutch investors with an investment portfolio of $50 billion seeking investment opportunities with local businesses.
Addressing delegates to the original equipment manufacturers’ conference at the Zimbabwe International Trade Fair (ZITF) in Bulawayo yesterday, the bank’s head of strategy, advisory services and marketing, Mr Joseph Mverecha, said the Dutch investors were targeting investment in agriculture, mining, energy and power.
“Two days ago, we had a very serious meeting with Dutch investors and they want to invest in either ongoing businesses or new companies.
“These investors have got a $50 billion portfolio and are looking for significant investment, they are seeking to invest for example, in agro-processing,” he said.
Mr Mverecha said the Dutch investors have also indicated that they were strictly looking into projects targeting funding of at least $50 million.
“And they want to take up equity and provide financing and if you think you have got something like that we can discuss.
“You would work together with our financial engineers to design the equity arrangements, which allows you to claw back for them to move out maybe after five or seven years, but they will inject the initial capital at the beginning of the project,” he said.
In addition to Agribank’s own internal financing facilities to business, Mr Mverecha said his institution for the past two years has been disbursing Reserve Bank of Zimbabwe (RBZ) supported resources such as the export facility, value addition facility and the horticulture fund. All the above facilities have got a working capital and capital expenditure component of 10 percent interest per annum.
RBZ funding schemes to the private sector through selected banks include the $10 million business linkage facility, soya beans facility ($21,51 million) and tourism support facility ($15 million). The apex bank has acknowledged lack of effective disbursement, which is blamed for frustrating economic recovery. This is despite the institution’s loans being the lowest in the market with an interest rate of 7,5 percent per annum.
“In respect of the lines of credit, Agribank has in the past secured lines of credit particularly from the Industrial Development Bank of South Africa (IDSA) and other places.
“We are now at an advanced stage of one or two facilities and we will be communicating this once we have put pen to paper.
“But we think this will also be very good for exporters and also for the value chain suppliers,” he said.
Following the adoption of a multi-currency system in February 2009, local companies have faced funding challenges to retool as most of the equipment is obsolete. Government through RBZ has announced that it is working on creating more funding mechanisms for local companies to retool and become competitive in light of the envisaged foreign direct investment under the new dispensation.
Zimbabwe expects approved investment proposals to reach a record $2,5 billion this year on the back of growing positive investor sentiment and interest following political changes that occurred in November last year.
The new Government under President Mnangagwa has pledged to guarantee the rights of foreign investors and to re-engage with the international community to attract investment.