- The funds secured will be used in building five hospitals and 30 clinics.
In order to carry out a 2019 agreement with UK infrastructure company NMS for the development of hospitals and clinics in the nation, Zimbabwe is to raise US$193 million in offshore lending. The deal, which will be covered by the Export Credit Insurance Corporation of South Africa, is being jointly arranged by ABSA and Standard Bank of South Africa.
The initial contract was for NMS to construct clinics in Cowdray Park and Stoneridge, both in Bulawayo and Harare. The Zimbabwean government paid $25 million in cash for the project’s earliest phases, which also included four other hospitals. With funding now in place for the following phase, NMS intends to construct thirty 20-bed clinics and five District Hospitals with 80 beds each. The structured finance package backed by the ECA will now pay for the remaining portion of the project.
According to a joint statement by ECIC, Absa and Standard Bank said: “This structured financing ushers in an exciting re-emergence of Zimbabwe in international capital markets, and the project, for the delivery of quality healthcare infrastructure for the people of Zimbabwe, represents a fine example of the effective combination of government, industry and the financial services sector delivering excellent outcomes.”
Zimbabwe is utilizing US$35 million of IMF SDR funds as cash cover, which will be deposited in an offshore SDR escrow account, to win the support of the foreign banks. The monthly royalties will provide an additional US$2.5 million to cover the bills. ECIC will offer insurance protection.GKB Ventures and Sullivan & Worcester from the UK are the project’s advisors.
Andrew Bvumbe, Head of the Aid and Debt Management Office in the Ministry of Finance said that “this financing package is highly significant for Zimbabwe and the underlying ‘Built to Care’ rural healthcare project is a key priority for our nation. We are committed to it and to providing the funds for it”.
Other African projects by NMSI include a $300 million hospital construction contract in Zambia, as well as $175 million in Ghana and €326 million in Ivory Coast. In order to reduce expenses, the business incorporates prefabricated steel frame constructions in its designs.
Due to a significant skills flight and inadequate investment in public health facilities, Zimbabwe’s healthcare facilities have crumbled in recent years.