Source: The Herald – Breaking news.
Business Reporter
The Industrial Development Corporation of Zimbabwe (IDBZ) has increased the size of its revolving credit facility from $24 million since it began its lending role in 2019 to over $2,2 billion, Industry and Commerce Minister Dr Sekai Nzenza has said.
Funding extended to companies in various sectors of the economy under the facility resulted in the creation of 2 000 new jobs while preserving 7 000 existing ones.
IDCZ, the State-owned industrial conglomerate with an investment portfolio in sectors such as fertiliser, chemicals, automobile, property, cooking oil, and cement assumed an extended role as Development Financial Institution to provide cheap loans mostly to start-ups and to enterprises with potential to export.
This is in line with the Government’s thrust to expand the country’s industrial base and import substitution agenda. Managed as a revolving facility, it means that as other beneficiaries of the fund repay, the reserve being built becomes available to others.
“The entity assumed the lending role in 2019 with $24 million seed money and to date the revolving funds have grown to $2,2 billion,” said Minister Nzenza in a report to the Cabinet recently. “Over 2 000 new jobs have been directly created and a further 7 000 preserved across the benefiting sectors, Dr Nzenza added.
The funding is strictly for firms in the manufacturing sector and those in value addition and beneficiation of local raw materials. This can be in the form of debt, equity, or any other mutually agreeable suitable structure for the projects at hand.
Priority being given to projects pursuing projects in line with the national development strategy, import substitution and exports generating investments. As a DFI, the funding is designed to be at concessionary rates to cater for beneficiaries who may not be able to qualify for commercial funds from the banks, according to IDCZ.
IDCZ identifies and develops industrial project opportunities into commercially viable entities in partnership with local, regional, and international investors. Apart from relying on Government funding, IDCZ said it will soon go onto the market to source additional funding, both onshore and offshore to augment available resources.
Some of the IDCZ-funded sectors include mineral beneficiation stock feed production.
IDCZ financed the working capital requirements for a stockfeed manufacturer to increase capacity utilization. It also funded the capital expenditure and working capital requirements for the company which is currently the only laboratory equipment manufacturer in Zimbabwe. Instead of having the country import sodium silicate rock, the corporation provided capital funding for equipment to produce sodium silicate.
With the local industry recovering there is huge demand for engineering services in infrastructural development and supply of a vast array of industrial implements and consumables.
These are normally imported as the local companies do not have the capacity to meet the demand. As such, IDCZ is assisting engineering companies in developing modern workshops with equipped foundries, state-of-the-art analytical laboratories, and pattern-making and fabrication workshops equipped with proper machines to enable them to develop the requirements of the industry.
In the timber sector, IDCZ assisted a company with working capital requirements to purchase raw timber to meet demand both for local and regional customers. This has resulted in the company employing more people and increase production.
The company manufactures timber-based products using timber purchased from various sawmills and further processes or value add before selling on the local market or export.
In the quest to provide safe drinking water, the corporation capacitated a company involved in purifying and bottling water with both working capital requirements.
It also funded a company in the construction sector to increase capacity utilisation.
IDCZ gave a meat processing company with capital expenditure to expand the abattoir and increase slaughter capacity. The firm managed to supply potential export markets and increased the number of both permanent and casual workers.
IDCZ Limited also financed an organisation in the business of manufacturing maize and soya-based nutritious foods and beverages with working capital which was mainly used to procure raw materials such as maize, sugar, and soya beans.
The company managed to increase the production of instant mahewu, porridge, and other cereals coupled with the creation of additional jobs along the value chain.
A company in the business of manufacturing clay bricks received funding from the IDC to acquire plant and machinery, and working capital to boost the business
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