THE Industrial Development Corporation of Zimbabwe Ltd (IDC) has applied for financial assistance from the Reserve Bank of Zimbabwe (RBZ)’s productive sector facility.
“IDC corporate seeks to access the productive sector facility funding for some of its quick-hit programmes,” IDC group financial director Peter Madara said.
The IDC has presented a paper to the Ministry of Industry and International Trade pointing out what the money would be used for.
Madara said the IDC was not fortunate enough to be one of the firms invited by the RBZ to access funds through the productive sector facility.
“We believe we should be allowed to access the PSF, considering the number of productive projects we already have underway,” he said.
To qualify for the productive sector facility an organisation is expected to produce externally audited financial results. They also have to name a turnaround programme.
The IDC is among the few parastatals in Zimbabwe that produce audited financial results.
In his monetary statement review, RBZ governor Gideon Gono said he would not accept applications from companies or parastatals that did not produce externally audited accounts.
The deadline to meet these requirements is July 31.
Madara said the IDC did not have adequate funds to undertake capital projects.
He said the funds were inadequate to finance the envisaged capital investments, in addition to the 2004 replacement capital expenditure of $57,6 billion within group companies.
Madara said there would be recourse to appropriately priced long-term local project finance, foreign direct investment and shareholder new equity investment.
“The shareholder was requested to consider taking foreign exchange risk in the projects,” Madara said.
He said it was recommended in the industrial policy review that government policy should define national projects where the state would bear exchange risk. IDC has several new projects underway such as mushroom farming, tobacco and sanitary pads manufacturing.
The corporation intends to process local tobacco to cutrag on a short to medium-term basis and ultimately venture into cigarette production.
IDC is also exploring the possibility of creating a new local cigarette brand.
The corporation recently registered a strategic business unit, Invesys Investments (Pvt) Ltd, trading as IDC Agrotech Industrial Holdings.