IDC seeks $20m loan facility
THE Industrial Development Corporation of Zimbabwe will engage its namesake, IDC South Africa for a $20 million loan facility aimed at kick-starting its role as a development finance entity.
IDC Zimbabwe public relations advisor Dereck Sibanda confirmed the plans on Friday.
“We engaged the IDC South Africa for a $20 million facility which is aimed at kick-starting IDC Zimbabwe’s plans to start providing development finance to the industry.
“This follows a Cabinet resolution which stated that IDC should start playing its role as a development finance provider. IDC South Africa said we should engage them after July this year as they are still undergoing some internal restructuring,” said Mr Sibanda.
The Government as the shareholder is also expected to avail some seed capital into the institution.
IDC Zim is mandated to establish and conduct any industrial undertaking, to facilitate, promote, guide and assist the financing of new industrial undertaking (including small and medium-scale), schemes for the expansion, better organisation and modernisation of and more efficient carrying out of operations in existing industries and industrial undertakings.
“The removal of the corporation from the (OFAC) sanctions has played a big part in our prospects of offering development funding. Now we can engage different DFI’s considering that we are no longer on the sanctions list,” said Mr Sibanda.
Meanwhile, IDC which has vast investments covering vehicle assembling, cement and chemical manufacturing, real estate, fertiliser production, edible oils manufacturing, mining, industrial engineering, has applied for exemption from paying duty on semi knocked down (SKD) kits that it is using to assemble vehicles at Willowvale Motor Industries in order to boost production and meet demand.
Under the proposal WMI, whose order book is now at 70 percent, wants Government to waiver duty on SKDs and instead impose the duty on completely built units.
Mr Sibanda said the waiver was critical to facilitate production.
“At the moment we have to pay duty to Zimra for the release of SKD kits from the bonded warehouse, which is slowing down production because we do not have ready cash.
“However, if we are to be allowed to have the kits without paying duty and Zimra holds on to the finished units until duty is paid, production will increase.
“We have customers that do not want to place an order and wait for 3 to 5 days for them to receive their vehicle they just want to pay and collect their vehicle,” he said.
Mr Sibanda said they were happy with the response from the market so far.
“There has been a good response from the market especially Government institutions, which have been making inquiries while others have already placed their orders and are waiting for Treasury to release funds.
WMI reopened at the end of March after five years following the establishment of a joint venture company, Beiqi Zimbabwe by China’s fifth largest car manufacturer, the Beijing Automobile International Corporation (BAIC), WMI and Astol Motors for the assembly and sale of the BAIC Grand Tiger pickups and other models in Zimbabwe.