IDBZ lists $65m bonds

HARARE – The Infrastructure Development Bank of Zimbabwe (IDBZ) on Wednesday listed its $65 million bonds it issued in 2014 for energy infrastructure projects on the Financial Securities Exchange.

Finsec chief executive Collen Tapfumaneyi said the listing of these bonds by IDBZ demonstrates confidence in local capital markets and “is an important signal to both local and international investors that indeed our economic recovery and growth is well and truly underway”.

“The new political dispensation provides further impetus for accelerated growth and development of our infrastructure to prepare our country for the anticipated upsurge in investments, as well as upscaling and retooling of local industries,” he added.

Finance ministry permanent secretary Willard Manungo said the maiden listing of the energy bonds was a very positive milestone which provides flexibility to investors in terms of investment period, and also helps IDBZ to achieve its objective of deepening capital markets.

“In addition, the debt capital market continues to provide a viable alternative investment avenue for institutional investors.

“Therefore, in the fullest of time, we expect the debt capital market to grow to the same levels as our already developed equities market,” he said.

Manungo further indicated that going forward government will continue to work with the infrastructure development bank to ensure that it is well capacitated to enable it to strategically fulfil its mandate in infrastructure development.

“On its part, the bank structures its infrastructure bonds as self-liquidating instruments on the back of cash flows from the underlying projects, while government lends its support to the bank’s capital raising initiatives by providing various enhancements which make the instruments attractive to investors,” he said.

The support includes issuing of government guarantees, tax exemption status and prescribed asset status.

“It is also important to note that whilst the bonds are guaranteed by treasury, the bank’s instruments continue to perform in line with their terms and conditions, without any incidences of missed or delayed payments.

“This is testimony to the bank’s structuring capability and the credibility of the instruments,” Manungo said.