The Mutapa Investment Fund is turning to Afreximbank to help raise up to US$50 million for the technical support it needs to turn State assets into bankable investments, a likely pointer of the fund’s strategy on parastatals.
Afrex announced on Monday that it has signed a Joint Project Preparation Facility Framework Agreement to mobilise project preparatory funding for the financing of projects. Project preparation funds are used to fund feasibility studies and technical assistance, critical in ensuring projects are investment-ready and attractive to financiers.
Mutapa is targeting projects in energy, transport and logistics, agro-processing, mining, and beneficiation under this facility.
“Through this partnership, Afreximbank will support MIF’s portfolio of investee companies to access project preparatory funding to create a robust pipeline of bankable projects that Afreximbank, MIF and other financial institutions can readily finance,” Afreximbank says in a statement. “The collaboration marks a bold step towards unlocking investments into the energy, transport and logistics, agro-processing, solid minerals development and beneficiation services, as well as industrial and allied sectors.”
Denys Denya, executive VP of the bank, has previously said Zimbabwean businesses had good ideas, but failed to package them well for investors.
“We have had approaches where people said they want to do certain projects, yet they lacked factual information as to why they want to do it, where it is going to be situated and what is needed,” Denya told Business Weekly in August.
This agreement, and recent policy changes, point to Mutapa’s strategy on some of the State assets that it has under its control. The company is looking for new investment in some parastatals, many of which have vast assets but have been run into the ground over years of mismanagement. This strategy includes Mutapa seeking foreign investors to take up stakes in its companies, as it has done with plans to develop a lithium project at Sandawana.
In October, Mutapa CEO John Mangudya claimed Mutapa had completed a “comprehensive diagnostic assessment” of its portfolio, and that this valued its vast assets at US$16 billion.
Last year, a government gazette controversially exempted Mutapa from the Public Procurement and Disposal of Public Assets Act, which compels public enterprises to go through the Procurement Regulatory Authority of Zimbabwe to pay for goods and services. This exemption opens the path for Mutapa to make investment decisions – such as selling or buying shares in companies – a lot quicker than it would have under previous regulations.
In November, the government also changed the law to allow Mutap to use State assets as collateral to borrow money.
ALSO READ | New law: Mutapa can now use State assets to borrow money
