CONTINENTAL lender Afreximbank is in talks with Zimbabwe's government to explore ways to extend funding for infrastructure and mining projects, the Zimbabwe Independent has learned.
This effort is part of the bank's Intra-African engineering, procurement, and construction (This effort is part of the bank's Intra-African engineering, procurement, and construction (EPC) promotion initiative. ) promotion initiative.
The initiative aims to provide financing and capacity-building solutions for the development of the continent's EPC needs.
The multilateral lender consolidates existing products to promote African participation in large-scale infrastructure projects.
This aims to drive EPC value chain growth through financing facilitation and support for various stakeholders, including governments and financial institutions.
Afreximbank is one of Zimbabwe's key external lenders, with the government owing the pan-African bank US$381 million as of September 2024.
Ayman El-Zoghby, director of trade investment and corporate finance at Afreximbank, told the Independent last week during the 2024 Africa Investment Forum Market Days held in Morocco that the bank has several initiatives for Zimbabwe.
“We are really doing a number of things. We also try to do facilitation into any kind of services. We try to provide investment guarantees so that we can de-risk the opportunity for international investors,” El-Zongby said.
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“We have lent a lot of support to the government, to the financial sector, to the strategic sectors of the country, electricity, mining, and so many other things. When it comes to construction, we are also in discussions with Zimbabwe and construction companies to provide some financing support to mining projects.
“So, we have been there for Zimbabwe. At the moment, we have a facility; it is around US$50 million to support one of Zimbabwe’s construction companies to do a mining project that is very critical to the country.”
While he could not disclose the company, he said discussions were at an advanced stage.
“We have provided support to the electricity sector and to the energy sector in Zimbabwe. We have done a number of transactions to support the energy sector quite a lot. We have also done other road infrastructure projects,” El-Zongby said.
“We are now part of the Zimbabwe initiative to build the new capital. We are in partnership with Egypt. Egypt has done (a) new capital very recently, so we are using the Egyptian holding company to partner with Zimbabwe in doing the new capital.”
He said the bank was also channelling support towards Zimbabwe’s energy and road infrastructure projects.
According to Afreximbank, as of November 2021, it had made total disbursements of US$13 billion to Zimbabwe
During that same month, Treasury revealed that Zimbabwe’s infrastructure and utilities capital needs totalled US$19,68 billion.
Zimbabwe has been struggling to access fresh investment capital from global lenders, owing to a US$21 billion public debt and the government’s refusal to implement recommended economic and political reforms.
El-Zoghby bemoaned Africa’s “perceived” risk, citing that investors were shunning the continent due to that factor.
“We try to encourage African direct investments, not just international direct investments, but to encourage Africans to go and do more in other African countries, where the perceived risk is lower as opposed to other international players,” he said.
“So, we are doing a number of things. Just like so many other African countries, Zimbabwe is not different. So many other African countries are battling with debt issues and other political issues. But as I said, they are all member countries of the bank, and Zimbabwe is one of the founding member countries of the Afreximbank.”
