Infrastructure Development Bank of Zimbabwe · execution. The MTS brings sharp focus on...

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Infrastructure Development Bank of

Zimbabwe

Company Profile or Information Memorandum

provided to;

The State Enterprises Restructuring Agency (SERA)

for;

Updating data base of commercial State Enterprises and Parastatals (SEPs)

as at 5 February 2018

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Table of Contents 1. Overview of the business ........................................................................................................ 1

2. Ownership and control ............................................................................................................ 1

3. Strategy and Business Model .................................................................................................. 3

3.1 Recent reforms being carried out by IDBZ ...................................................................... 5

3.2 Adoption of the Medium Term Strategy and Result Based Management Framework .... 5

3.3 Human Resources and adaptation of the organisation structure ...................................... 6

3.4 Policies and administrative procedures ............................................................................ 7

3.5 Improvement of the Bank’s ICT systems and data management systems ....................... 7

3.6 Financial systems, internal controls and audits systems .................................................. 8

3.7 Bank’s Risk and compliance systems .............................................................................. 8

3.8 Bank’s Capitalisation and Orientation of the Resource Mobilisation Framework .......... 9

3.9 Bank’s Treasury Functions............................................................................................. 10

3.10 Bank’s External Credit Rating .................................................................................... 10

3.11 Revamping of the procurement processes .................................................................. 10

3.12 Overall remarks on reforms ........................................................................................ 10

4. Customers and Customer Relationships ............................................................................... 11

5. Products and Services ........................................................................................................... 13

5.1 Corporate Loans (On Balance Sheet loans) ................................................................... 13

5.2 Project Finance Loans (Off Balance Sheet) ................................................................... 13

5.3 Private Sector Investments ............................................................................................. 13

5.3.1 Corporate loans (on Balance Sheet) ........................................................................ 13

5.3.2 Project Finance (off Balance Sheet) ....................................................................... 13

5.3.3 Structure Finance .................................................................................................... 14

5.3.4 Guarantees............................................................................................................... 14

5.3.5 Overdraft ................................................................................................................. 14

5.4 Trade finance .................................................................................................................. 14

5.5 Resource Mobilisation Products..................................................................................... 14

5.5.1 Project Preparation Funding ................................................................................... 15

5.5.2 Project & Infrastructure Finance ............................................................................. 15

5.5.3 Bonds ...................................................................................................................... 15

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5.5.4 Project Management and Advisory Services .......................................................... 16

5.5.5 Climate finance ....................................................................................................... 16

5.6 Treasury Products ........................................................................................................... 16

5.6.1 Call Accounts .......................................................................................................... 16

5.6.2 Fixed Deposits ........................................................................................................ 16

5.6.3 Bankers Acceptances .............................................................................................. 17

5.6.4 Treasury Bills .......................................................................................................... 17

5.6.5 Negotiable Certificates of Deposits (NCDs)........................................................... 17

5.6.6 Portfolio Management ............................................................................................ 17

5.6.7 Currency Switches .................................................................................................. 17

6. Market Segments .................................................................................................................. 18

7. Competitive overview ........................................................................................................... 18

8. Company and Product Brands .............................................................................................. 21

9. Sales and communication ..................................................................................................... 21

10. Industry trends ................................................................................................................... 23

11. Managements and employees ............................................................................................ 25

11.1 Staff Compliment ....................................................................................................... 25

11.2 Gender Distribution .................................................................................................... 26

12. Operations and business process (ICTU) ........................................................................... 26

13. Facilities and premises ....................................................................................................... 26

14. Vendors and suppliers ........................................................................................................ 32

15. Information systems ........................................................................................................... 33

15.1 Improvement of the Bank’s ICT systems and data management systems ................. 33

15.2 Enterprise Information Technology Layer ................................................................. 33

15.3 Function Information Technology Layer ................................................................... 34

15.4 Network Information Technology Layer .................................................................... 34

15.5 IT Governance and Management ............................................................................... 35

15.6 Business Continuity and Disaster Recovery ............................................................... 35

16. Proprietary Technology and Intellectual Property (ICTU) ................................................ 35

17. Legal, Regulatory and Environmental ............................................................................... 35

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List of Tables Table 1: Infrastructure Development Bank Shareholders, 2017 ................................................................... 1

Table 2: Stakeholder and Customer Analysis ............................................................................................. 11

Table 3: A Description of Direct Competitors of the IDBZ ........................................................................ 19

Table 4: Market Demographic Profile for the IDBZ .................................................................................. 22

Table 5: The IDBZ Distribution Network ................................................................................................... 23

Table 6: Staff Compliment as at December 2016 ....................................................................................... 25

Table 7: Staff Compliment as January 2018 ............................................................................................... 25

Table 8: Gender distribution of staff compliment as at December 2016 .................................................... 26

Table 9: Gender distribution of staff compliment as at January 2018 ........................................................ 26

Table 10: The Bank Properties as at 31 January 2018 .............................................................................. 27

Table 11: Statistics of IDBZ suppliers and contractors .............................................................................. 32

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1. Overview of the business

The infrastructure Development Bank (IDBZ) is mandated to promote economic development

and growth to improve the living standards of Zimbabweans through the development of

infrastructure including but not limited to roads, dams, water reticulation, housing, sewerage,

technology, amenities and utilities.

The Bank is also mandated to develop institutional capacity in undertakings and enterprises of all

kinds in Zimbabwe and support development projects and programmes in all sectors of the

Zimbabwean economy (IDBZ Act, 2006).

The rationale underlying the establishment of IDBZ is the creation of specialist Development

Finance institution that focuses on infrastructure related projects either through execution of the

same or provision of capital (or resource mobilization), technical assistance and advisory

services in order to facilitate execution of key infrastructure projects.

2. Ownership and control Table 1: Infrastructure Development Bank Shareholders, 2017

Shareholder No. of Ordinary

Shares

No. of Preference

Shares

Government of Zimbabwe

3,901,549 382,830

Reserve Bank of Zimbabwe

552,434 0

Zimre Holdings Limited

8,001 0

IDBZ Staff Share Trust

78 0

Fidelity Life Assurance Company of Zimbabwe Limited

12 0

Finnish Fund for Industrial Cooperation Limited (Finnfund)

6 0

African Development Bank (AfDB)

4 0

German Investments & Development Company (DEG)

3 0

Netherlands Development Finance Company (FMO)

3

0

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European Investments Bank (EIB)

1

0

TOTAL

4,462,091

382,830

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3. Strategy and Business Model The business process used by IDBZ concentrates on ensuring that inputs are converted into outputs via well-defined set of activities

with the objective of realizing infrastructure development impacts. This is illustrated by the figure below:

Inputs

Specialised Mandate

Strong Gvt Support

Specialised skills

(Financial,

Engineering,

Environmental,

Procurement , Legal)

Systems and Process

Equity and Debt

Funding

Effective Leadership

Activities

Project Preparation

and Packaging

Resource Mobilisation

Project

Implementation

Monitoring and

Management

Infrastructure Value

Chain Financing

Outputs

Power Plants

Transmission Lines

Gas and Oil Pipelines

Roads

Airports

Railway-lines

Border Posts

Dams

Water and sewer systems

Irrigation infrastructure

ICT back borne and

distribution

Impacts

Improved access to

Energy

Improved transport

network

Improved access to

safe water and

sanitation facilities

Improved access to

telecommunication

services

Improved Agriculture

Production

Key Result Areas

2. Infrastructure Financing.

1. Project Development and Management

4. Knowledge Generation and Sharing

3. Financial Sustainability

5. Institutional Efficiency

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The IDBZ’s operations are guided by Annual Work Programmes and Budget (WPB). In turn,

these WPBs are guided by the mandate of the Bank which is focused on promoting economic

development and growth, and improvement of the living standards of Zimbabweans through the

development of infrastructure. The Bank’s focal sectors remain Energy, Transport, Water and

Sanitation, Information Communication Technology (ICT) and Housing.

The Bank’s WPB are designed in a way that promotes the Bank’s Medium Term Strategy: 2016-

2020 (MTS) and its Recapitalisation Plan, both of which are aimed at effective mandate

execution. The MTS brings sharp focus on infrastructure development in the energy, transport,

water and sanitation, ICT and housing sectors. The Recapitalisation Plan is a prerequisite for

effective resource mobilisation in the targeted sectors. The MTS was formulated in line with the

Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset), the Ten-Point

Plan and the Sustainable Development Goals (SDGs). The Bank’s strategic thrust is also in line

with the Government of Zimbabwe Interim Poverty Reduction Strategy Paper (IPRSP-2016-

2018).

The vision of IDBZ remains “A Zimbabwe with a robust, inclusive and sustainable growth and

development”. The Bank continue to vigorously pursue through its WPBs the Mission “To

champion sustainable infrastructure development through: mobilization of resources; enhancing

its staff compliments, capacity building, strengthening knowledge generation and sharing in

support of national efforts for inclusive socio-economic development”.

IDBZ management continue to work towards consolidating strides made in refocusing the Bank

towards growing its capital base, broadening sources of finance, fostering strategic partnerships

with development partners, re-aligning business processes with best practice, implementing the

approved new banking system and deepening the Bank’s human capital.

The Bank continues to be guided by the following value system of Integrity, Professionalism,

Innovation, Service Orientation and Knowledge Generation and Sharing.

IDBZ management acknowledges the fact that IDBZ internal operations will not be immune to

external developments. Such external developments include the global economy, movements in

commodity prices internationally and international financing conditions. Further, management is

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aware that the Bank is also likely to be affected by the developments in domestic that include GDP

growth, macroeconomic stability, political and legal developments. These external developments

provide opportunities and risks to the achievement of Bank’s targets, therefore the Bank take stock

and come up with appropriate measures and initiatives.

As part of mandate consolidation, the Bank continues to focus on the following Key Result

Areas (KRAs): infrastructure financing; infrastructure projects development and

management; financial sustainability; knowledge generation and sharing; and institutional

efficiency.

3.1 Recent reforms being carried out by IDBZ

Consistent with the Banking Act (Chap 24:20), IDBZ in 2014 undertook a restructuring exercise

aimed at strategically refocusing operations away from short term business towards its core

infrastructure mandate. Pursuant to this, over the past three years the Bank has been carrying out

reforms aimed at revamping its business operational systems, ICT systems and procedures,

including making its risk management systems adequate to ensure compliance with the Banking

Act. A consolidated Policies, Operations Guidelines and Manuals document covering all aspects

of the Bank’s operations have been prepared and will be rolled out in 2018. Specifillay the

Bank’s 2018 Work Programme and Budget were crafted around the theme: “Harnessing

partnerships for infrastructure rehabilitation, expansion and national socio-economic

transformation”. These reforms that are on-going are now at an advanced stage and are

summarised and grouped as indicated below:

3.2 Adoption of the Medium Term Strategy and Result Based Management

Framework

As part of its reform process the Bank drafted its Medium Term Strategy (2016-2020), and the

Results Measurement Framework (RMF) for the same period. The RMF translates the MTS into

a detailed set of indicators and targets to help the Bank plan its work better and sharpen its focus

on delivering developmental results. It is designed in such a way as to assist the Bank to report

on development results and institutional performance based on four levels namely; Level 1:

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Overall development progress; Level 2: Bank’s own contribution to development progress; Level

3: Operational performance; and Level 4: Organisational efficiency. The RMF provides a

platform for continuous and rigorous monitoring and evaluation of the Bank’s performance

against measurable targets in an effort to improve its developmental effectiveness. It enhances

the planning cycle, systematically tracks performance and fosters organisational learning. Is

expected that the RMF will help the Bank meet its development goals as it is a tool that brings

together evidence of the IDBZ’s strengths and weaknesses so that management can chart a

course of action that helps the Bank to implement its strategy in the most effective and efficient

way possible. The Bank is working on increasing its capacity in the areas of strategic alignment,

performance and monitoring. This will help to align the Bank’s strategy with its development

mandate and to advice both on the internal and external economic factors that have a bearing on

the success or failure of the Bank in terms of achieving its strategy.

3.3 Human Resources and adaptation of the organisation structure

In an effort to ensure that the Bank remains relevant to its mandate, its structure had to be

adapted. With effect from mid-2016, the Bank started implementing a new Organizational

Structure comprising of the Castellion Job Grades following the approval by the Board of

Directors. The fine tuning of the organisational structure was also done to enhance institutional

efficiency, promotion of functional independence and segregation of duties. The adaptation,

refocusing and strengthening of the structure started in 2015 when 41 employees were retrenched

as a cost cutting measure.

The restructuring led to the maintenance by the Bank of a core staff complement that is more

focused and oriented towards infrastructure development and the financing of critical activities in

the infrastructure value chain. Management also embarked on various human capital reforms

aimed at improving institutional efficiency, creating clear flow of responsibilities, promoting

greater equity and mapping career development plans. To support this, the Bank embarked on a

job grading exercise which was followed by a salary re-structuring exercise. The exercise was

aimed at fostering equity within the institution’s remuneration framework whilst promoting

career development ladders for the Bank’s human capital. In terms of performance, a staff

evaluation and appraisal process has been adopted and is being rolled out. This tool is used to

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ensure individual staff members deliver in line with their annual work plan targets and are

monitored and evaluated accordingly in order to improve institutionally efficiency.

The key business entities of the Bank were strengthened through resourcing them with critical

skills that would ensure efficiency in the delivery of the Bank’s mandate. The Bank made

significant progress in knowledge management and talent nurturing in a bid to develop a talent

pipeline. The focus has been on building a Bank that values people, develops their talent and

creates opportunities for career development. To enhance its effectiveness in the delivery of its

mandate, the Bank also recruited critical staff and consultants in engineering, financial analysis,

procurement, architecture and land valuation. By the end of 2016, the Infrastructure Projects

Department was optimally resourced.

3.4 Policies and administrative procedures

The human resource re-orientation was also complemented by the revamping of the Bank

policies and procedures to ensure that they remain relevant to the operating environment and the

needs of the Bank. This has been done also to improve internal controls and efficiency in service

delivery. In this regard, the Bank engaged an independent Consultant to revamp a number of the

Bank process flows aimed at achieving internal efficiency and the ability of the Bank to satisfy

external stakeholders’ interest.

3.5 Improvement of the Bank’s ICT systems and data management systems

Currently, automation is limited to commercial core banking activities whereas the greater part

of the Bank operates manually or employs stand-alone systems such as Microsoft Office

products. In 2016 the Bank engaged an independent consultant to review ICT policies; business

procedures and methods and to explore the implementation of a cloud-based data and

infrastructure monitor for tracking the Bank’s performance and information portal for national

projects including assessing of the robustness of ICT configurations to combat cybercrime; and

fortifying its systems in a bid to maintain the integrity of its financial telecommunications

infrastructure and guarantee uninterrupted service to its clients. As part of the reforms, in the

next three years, the Bank intends to implement integrated systems that map directly to the data

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warehouse or Data Platform which is being developed, to avoid the proliferation of ‘unrelated’

systems.

Management will seek to identify and implement ERP systems that encompass procurement,

human resources management, banking and project management. An IDBZ Data Platform has

been prepared and it is being roll out on an on-going basis. The data platform consist of a two

Web-based applications (Data Monitor and Infrastructure Monitor), mobile application (for iOS

and Android platforms), underlying data warehouses to support the storage and management of

the required data and metadata, and additional features and tools. The platform support IDBZ’s

efforts to meet increasing demands for more timely and diverse statistical data, ensuring high

statistical standards, and realizing the full potential of statistical information.

3.6 Financial systems, internal controls and audits systems

The Bank’s financial control and management constitute financial reporting, and revenue and

cost monitoring. As part of its reforms, the Bank is undertaking a number of initiatives such as

the preparation of the Bank for new financial reporting standards especially the IFRS 9 –

Financial instruments which is expected to have a material impact on impairments for loan and

advances. In addition, the Bank will be implementing the new long-form auditor’s report, a

requirement by the International Standards on Auditing which requires disclosure of key audit

matters found during an audit. The Bank will also be implementing the updated financial

policies and procedures to achieve effective and efficient financial controllership throughout the

Bank’s operations. Through these reforms, there will be improvements in the accuracy and

efficiency of financial and management reporting, in addition to having a system that fully caters

for the needs of the Bank and meets regulatory requirements.

3.7 Bank’s Risk and compliance systems

The Bank monitors risk by employing the use of the Enterprise Risk Management (ERM)

framework. As the adoption of the ERM framework continues to be enhanced, processes are

being streamlined to ensure that the Bank remains conscious of, and attends to, existing and

emerging risks that could vary expected outcomes. A Decision Support System to support the

execution of the Bank’s infrastructure mandate will be further developed to enhance project risk

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management. To ensure that risk management is embedded in decision making processes, the

Bank will institute risk management awareness programmes in the coming two years.

Furthermore, refinement of risk management policies and the alignment of capital measurement

models with Basel II/III/IV requirements will be gradually instituted so as to enhance the Bank’s

financial sustainability

3.8 Bank’s Capitalisation and Orientation of the Resource Mobilisation

Framework

The Bank has put in place a roadmap that seeks to achieve a US$250 million capitalisation level

by 2018. This takes in account the recognition that successful development banks in Africa, and

the world over, are well capitalized and self-financing, thus giving them capacity to effectively

deliver on their mandates in pursuit of facilitating socio-economic growth in their countries.

Through the on-going reforms, the Resource Mobilisation function was re-oriented towards

building a balance sheet capacity and to increase infrastructure financing outcomes through

pursuing the following (1) Capitalisation of the Bank (2) Strategic partnerships with other DFIs

(3) Capital market operations; and (4) Public-Private Partnerships (PPPs). For the Bank to

achieve its long term objective of self-financing, in the short term, the Bank according to its

MTS will relay on the Reserve Bank of Zimbabwe, the Ministry of Finance and Economic

Development in engaging potential investors in particular development finance institutions. The

Resource Mobilisation Operation was in 2016 transferred from the Infrastructure Projects

Department (IPD) to become an autonomous Division under the office of the Chief Executive

Offer to enable it fully concentrate on its mandate of facilitating capitalisation and raising of

other resources.

Given that the Bank was officially removed from the United States Office of Foreign Assets

Control (OFAC) sanctions listing in February 2016 combined with the GoZ efforts to clear the

external debt arrears to IFIs and improve the ease of doing business, there is an opportunity for

the Bank to accessing long term funding from the international markets. To facilitate the

preparation and packaging of bankable infrastructure projects, the Bank established the PPDF

with seed capital of $2.5 million from the Bank’s equity. The Bank is exploring with other

partners opportunities to grow this PPDF.

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3.9 Bank’s Treasury Functions

In its reforms, the Bank endeavours to provide treasury solutions that support infrastructure

projects through funds mobilisation, cash and liquidity management, trading in the money and

foreign exchange markets and management of financial risks. Treasury is focused on retaining

existing investing clients and to attract more institutional investors. Treasury is also geared to

raise resources on the back of Treasury Bills, Bankers Acceptances and other project specific

instruments and lower the cost funding. Treasury is also exploring ways to manage the Bank’s

cash and liquidity position to ensure that enough liquidity is available to meet obligations as they

arise through matching assets and liabilities, maintaining liquid assets and reserve funds.

3.10 Bank’s External Credit Rating

It is acknowledged that the work of the Treasury unit and the Bank’s Resource mobilisation

function will be enhanced greatly if the external credit rating improves. The Bank’s 2016

external rating for the financial year ended 31 December 2015, which is based on the Prudential

Standards, Guidelines and Rating System [PSGRS] for African Development Financial

Institutions was certified by the Bank’s external auditors Deloitte & Touche. The 2016

assessment was assigned an ‘A’ rating, the same as the 2015 rating. The rating scale evaluates

the Bank in three critical areas, namely; governance, financial prudence and operational

standards.

3.11 Revamping of the procurement processes

In 2016, the Bank engaged a procurement consultant to revamp its procurement policies, bidding

documents and procedures. There was skills transfer on handling procurement processes to

support transparency, fairness and economic efficiency. The major milestones in procurement

the development of policies, bidding documents, evaluation templates and procedures; and

training of Bank staff on application of best practice on procurement process.

3.12 Overall remarks on reforms

During the past three years the bank has operated under a challenging operating environment

characterised by low international commodity prices, declining foreign direct investments, lack

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of competitiveness, high cost of doing business, reduced aggregate demand, negative savings and

tight liquidity. Notwithstanding the tough operating environment and at the back of the on-going

reforms, the Bank’s revenue grew by 10% to US$7.42 million during 2016. This was spurred by

a focused effort on underwriting stable and long term assets in line with the infrastructure

development mandate. Significant progress has been made towards collection of the outstanding

loans amounts which has seed a significant reduction in Non-Performing Loans (NPLs). In

addition, revenue growth also benefited market operations as the Bank prudently maintained

adequate liquidity and invested cash reserves to support timely execution of infrastructure

projects. Total assets grew by 22 to US$159.98 million as a result of growth in the loan book and

other financial assets. Cash balances closed at US$22.83 million after growing 30 from the prior

year, a reflection of improving financial solidity whilst the Bank cautiously lent and invested in

the core mandate areas. The Bank scaled up collection its collection efforts during 2016 in line

with its shift towards infrastructure development. The Bank wishes to complete the reforms that

were started in 2014 and to continue to explore other means of fulfilling its development

mandate while at the same time remaining financially sustainable.

4. Customers and Customer Relationships In its operations the Infrastructure Development Bank of Zimbabwe interacts with stakeholders and

values understanding them. The section deals with the key stakeholders, their expectations and the extent

of these needs;

Table 2: Stakeholder and Customer Analysis

Stakeholder/ Customer Demands/expectations

1. Employees Career development,

Training and Development

Market and Performance Aligned

remuneration

Conducive working environment i.e. tools of

trade, effective organisational structures, open

communication and a positive culture

Quality Leadership

2. Board of directors

Financial Sustainability

Sustainable Development impact

Quality information to enable them to make

decisions

Good corporate governance

3. Shareholders & Government Good corporate governance

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Shareholders (DFIs)

Office of the President and Cabinet (OPC)

Ministry of Finance

Parliamentary portfolio committees

Government ministries;

o Ministry of Energy and Power

Development;

o Ministry of Transport and

Infrastructure Development;

o Ministry of Local Government,

Public Works and National

Housing;

o Ministry of Environment, Water

and Climate;

o Ministry of Information,

Communication Technology, Postal

and Courier Services;

o Ministry of Youth, Indigenisation

and Economic Development

Adherence to applicable sector policies

Dividend

Increase impact of levels of infrastructure

development financing to reduce the

infrastructure gaps

Be more proactive in identifying opportunities

for resource mobilisation (ZIM ASSET)

Eradication of corruption

Co-operate with other spheres of government

including government agencies and

enterprises to ensure infrastructure

development

Youth development activities

4. PSP and IPD clients

Corporates Implementing agencies Appropriate medium to long term funding

Relevant and innovative products and services

Quality information (correct FCA/loan

statements)

Competitive pricing of other banking products

(TTs, switches, arrangement fees, other bank

charges)

Excellent customer service (Simplicity of

application processes, Speed of

approval/disbursement process,

Responsiveness)

Good governance and leadership

Capacity building

5. Business Partners

Commercial banks, Co-funders, DFIs, State-

owned enterprises, Corporates, Project

Developers, Government Agencies, Rating

agencies, Suppliers, Researchers (ZIMSTATS)

Relevance of products and services

Sharing expertise in key areas

Financial performance

Credit worthiness

Good governance and leadership

Capacity building

Positive impact on the economy and society

6. Communities

• NGOs (ILO),)

• General public

Beneficiaries of IDBZ activities (Youths etc)

Development impact on society (dams-irrigation,

roads, elimination of potholes etc)

IDBZ to be a good corporate citizen

• Expect IDBZ to be innovative

• Leadership and governance

7. Influencers

• Regulators

• Media

• Unions and activist bodies

Developmental impact (Meet IDBZ’s mandate)

Long-term financial viability

Business and financial information

Compliance with regulations (RBZ, Ministry

of Finance)

Adherence to good corporate governance

Transparency towards all stakeholders

Ability to innovate

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8. Industry bodies, research bodies and

associations (Bankers Association of Zimbabwe

(BAZ), Confederation of Zimbabwean Industries

(CZI), Banking Employers Association of

Zimbabwe (BEAZ), Chamber of Mines

Business and financial information

Participation in infrastructure events

(conferences, workshops)

Relevance of products and services

Positive impact on society

Governance and leadership

5. Products and Services The Bank provides capital for the development of infrastructure projects of demonstrable

economic and /or social benefit to:

i. Local Authorities (City Councils, Town Councils and Rural Councils)

ii. Parastatals (commercial as well as social utilities)

iii. Special Purpose Vehicles created within the context of Public Private Partnerships

on larger projects.

The loan products for these categories of business shall be:

5.1 Corporate Loans (On Balance Sheet loans)

i) Loans to State Owned Enterprises (SOEs) for up to 20 years

ii) Loans to Local Authorities (LAs) for up to 15 years

5.2 Project Finance Loans (Off Balance Sheet)

i) Structured Finance

ii) Concession Finance (i.e. for BOTs, leases, PPPs, etc.).

5.3 Private Sector Investments

The Bank will in exceptional circumstances, where viability is beyond reproach and adequate

realisable security has been demonstrated, offer lending facilities to the Private Sector. Such

lending will be in the form of Trade Finance structures and must be supported by sound tangible

and realizable security. The loan products to be offered to private sector clients shall be:

5.3.1 Corporate loans (on Balance Sheet)

Loans for up to 10 years

5.3.2 Project Finance (off Balance Sheet)

Loans for up to 15 years

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5.3.3 Structure Finance

Loans of up to 10 years based on firm off take agreements.

5.3.4 Guarantees

The Bank issues guarantees to support bid bonds, tenders, performance bonds, advance payments

in support of infrastructure development projects. Such bonds shall be issued in terms of laid

down procedures as set out in the operations manual and shall be for periods not exceeding 12

months, although they may be rolled over subject to fresh appraisal. Such Private Sector

lending shall be informed by the priorities of economic sectors of the country from time to time.

5.3.5 Overdraft

The Bank may from time to time consider extending bridging finance in the form of Overdraft

Facilities to infrastructure related projects to ensure little disruption to projects during resource

mobilisation. This facility will be extended to implementing agencies of infrastructure projects,

Corporates and SMEs. The facility may also be extended to Private Sector on an exceptional

basis where viability has been demonstrated and security is sound and adequate.

5.4 Trade finance

The Bank will engage in trade finance business activities in the value chain of priority

infrastructure sectors. The trade finance business has short end gains. The Bank’s involvement in

this business is strategic and aimed at continuously strengthening the balance sheet and creating

revenue for self-sustenance in the immediate future. The instruments which can be used include;

working capital short term loans, capital expenditure medium term loans, order financing,

guarantees facilities (bid bonds, performance guarantees), debt factoring, and asset finance

(lease hire).

5.5 Resource Mobilisation Products

In order deliver on the Bank’s mandate, resource mobilisation is critical. The Bank undertakes

resource mobilisation activities in a manner that ensures sustainable resourcing of the project

cycle from project preparation to implementation. Products offered by the Bank are outlined

below.

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5.5.1 Project Preparation Funding

The Bank has set up a Project Preparation and Development Fund (PPDF). Through the PPDF

facility, the Bank will ensure that priority infrastructure projects or concepts are developed to

bankability in a timely and transparent manner; and that these can then attract the right levels of

investment for successful execution. The PPDF facility was setup with an immediate allocation

of US$2.5 million out of internal capital and was projected to grow to US$5 million by the

beginning of 2017. The Bank intends to leverage on its internal resources by complementing

these with external resources from international development partners to attain a level of US$10

million in the medium term.

5.5.2 Project & Infrastructure Finance

The Bank provides Project and Infrastructure financing through various products and structures

that rely primarily on the project’s cash flows for repayment. The Bank’s project financing

structures are tailored to the project’s financing and operational requirements and also to investor

preferences particularly on the need to warehouse projects into Special Purpose Vehicles (SPVs)

in order to facilitate the ring-fencing of the project assets and attendant cash flows as a

mechanism to provide comfort to investors over the term of the project financing structure. The

Bank also facilitates the undertaking of infrastructure projects through Public-Private

Partnerships (PPPs) where the Bank provides technical direction in the packaging, procurement

and financing of the project and structuring the PPP arrangements. Implementing projects

through PPPs allows the use of long term capital with tenors stretching between 20 to 30 years.

The Bank offers the following products under Project and Infrastructure Finance:

i. Project Debt, Equity and/or Mezzanine (Hybrid) Financing

ii. Co-financing and syndications

iii. Public –Private Partnerships Project Finance though various PPP models

iv. Infrastructure bonds/commercial paper (as described under Treasury

below)

5.5.3 Bonds

These are instruments used by IDBZ, Government, quasi government institutions and

municipalities to raise long term funds, normally to finance projects such as housing, agriculture,

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dams, construction of roads etc. These instruments come with various sweeteners to clients such

as prescribed asset status, government guarantee, tradability in the secondary market and others.

They usually offer high long term returns at lower risk. They can be bought at a premium or

discount.

5.5.4 Project Management and Advisory Services

The Bank offers project management services to Government in the focus sectors. The Bank

performs loan administration and project monitoring services.

5.5.5 Climate finance

Climate finance is one of the emerging source of funding, therefore, the Bank intends to

undertake its intermediary role to promote low emission growth strategies and contribute to the

country’s achievement of its Nationally Determined Contributions in line with the Paris

Agreement (2015) which the country has ratified. The Bank was nominated by Ministry of

Environment, Water and Climate Change (MoEWC) as the National Implementing Entity

(“NIE”) whose role will be to coordinate project packaging and other activities aimed at securing

funding from the Green Climate Fund (“GCF”) and other providers of climate finance once the

Bank has been successfully accredited with the GCF.

5.6 Treasury Products

5.6.1 Call Accounts

These are convenient investment accounts where funds earn a floating rate of interest while they

are available on demand. Interest is calculated on the daily closing balance and credited to the

account on monthly basis. Call accounts attract lower rates than other investments but give

customers convenience to access their funds as and when the need arises.

5.6.2 Fixed Deposits

This product earns clients a guaranteed fixed return over a specific period. Investment periods

are tailor made to meet the client’s cash requirements. On maturity, both the invested amount

and the interest earned become payable to the investor or can be re-invested. Fixed deposits

have a tenor of 30 to 365days or even more. Assets such as Bankers Acceptances, Treasury Bills,

Promissory Notes and Commercial Paper can be used to secure such deposits.

17 | P a g e

5.6.3 Bankers Acceptances

Bankers’ Acceptances are drawn by our various clients and accepted by IDBZ. These Bills are

usually accepted at a discount and may be re-discounted in the secondary market. Bankers’

Acceptances are short-term borrowings by corporates normally for the purpose of meeting their

working capital. The target market is medium to large scale companies with a high credit rating;

hence the Bankers Acceptances have a very competitive return and security for our clients.

5.6.4 Treasury Bills

Treasury Bills are discounted securities issued by the Reserve Bank to finance short term

government expenditure. Treasury Bills yields vary with tenor which usually ranges from 91-

365 days. They can be purchased on a buy back or outright sale basis. Since they are

government guaranteed, they automatically offer the highest form of investment security. The

rate for Treasury Bills is usually a benchmark for the sourcing of other financial investments.

5.6.5 Negotiable Certificates of Deposits (NCDs)

These are bearer instruments issued by IDBZ and are highly liquid. Their tenor ranges from 30

days to 2 years. NCDs qualify as time deposits and investors are discouraged from withdrawing

funds before maturity.

5.6.6 Portfolio Management

IDBZ undertakes portfolio management for high net worth clients who want to invest for

medium to long term periods. The client would give IDBZ a mandate to manage the funds under

agreed terms and conditions. Through its Treasury expertise IDBZ allocates funds into best

paying assets relative to client’s cash flow needs and risk preference. Client gets periodic

portfolio performance reports and investment advice.

5.6.7 Currency Switches

IDBZ assists clients in converting from one foreign currency to another e.g. from US dollar to

Euro. A cross rate is applied; which indicates the prevailing value of one currency relative to the

other. The customer may require this product if he is in possession of one foreign currency, but

has to make payments in another foreign currency.

18 | P a g e

6. Market Segments The Bank customers can be categorized as Private Sector, Parastatals, Government Departments,

Employer Bodies/ Federations/ Unions, Local Authorities and NGOs. The Bank’s major market

segments include

Low income groups for housing stands;

Government Departments and Parastatals;

Private Sector players in the infrastructure value chain; and

The Bank covers both rural and urban areas in Zimbabwe.

7. Competitive overview

The Bank operates in the Infrastructure Financing Industry or Development Finance. Its

operations have a bearing or can be affected by the banking sector in genera. The Bank is an

active player in the local capital markets. Given the nature of the Bank’s operations, the Bank

targets providers of medium to long term funding through issuance of infrastructure bonds for

uptake by pension funds, insurance companies and fund managers. Within the capital markets,

the Bank’s instruments compete with issuances by Government mainly through Treasury Bills

and Notes/Bonds as well as issuances by the private sector mainly through Corporate Bonds. For

instance, competing instruments include short term instruments with better yields than the Bank's

instruments as well as performing equity markets which may provide investors with higher real

returns.

While the Zimbabwe economy is on recovery, it remains fragile due to the uncertain political

environment as there are pending elections, tight monetary environment and lack of fiscal space

by the central government.

The financial sector has continued to suffer due to liquidity constraints and inadequate long term

finance for infrastructure and capital expenditure. The low inflation environment however,

enabled the banks to charge positive real interest rates though to the detriment of business which

continuously complain of unsustainable cost of funds among many other things. The rates still

face downward pressure and banks are going to endure thin spreads. However, developments

with regards to inflation are likely to force rates upwards and are detriment to long term

investments.

19 | P a g e

The African Development Bank (AfDB, 2010) estimated that Zimbabwe’s infrastructure was at

US$14,2 billion, much of which is required in the transport and power sectors. The Ministry of

Finance estimates that the country needs between US$ 20 and 30 billion for full infrastructure

rehabilitation. The Government of Zimbabwe has indicated that power projects alone requires

about US$6,3 billion to implement key generation, transmission and distribution projects.

The IDBZ competes directly with international infrastructure development financiers that include

the Development Bank of Southern Africa (IDBSA) African Development Bank (AfDB) and the

Infrastructure Development Corporation of South Africa (IDCSA). However, these competitors

have also been neutralized as partners by the IDBZ in some cases.

Table 3: A Description of Direct Competitors of the IDBZ

Competitive

Aspect IDBZ

International Financiers

(DBSA/IDCSA/AfDB)

Target markets served Restricted to the Zimbabwean

market for services to players in

the;

Information Communication

Technology (ICT),

Energy,

Housing,

Transport, and

Water and Sanitation

Industries.

Open to the African market for services to

players in the;

Information Communication Technology

(ICT),

Energy,

Housing,

Transport, and

Water and Sanitation Industries.

Product attributes Funding and advisory services for

development projects in areas of:

ICT,

Energy,

Funding and advisory services for

development projects in areas of:

ICT,

Energy,

20 | P a g e

Housing,

Transport, and

Water and Sanitation.

Housing,

Transport, and

Water and Sanitation.

Pricing Prices and interest rates governed

by the RBZ.

Prices interest rates governed by their home

Governments as well as competitiveness of

international rates.

Promotions Promotions are carried out

through engagement at the

highest levels of organizational

and institutional levels.

Promotions are carried out through

engagement at the highest levels of

government, organizational and institutional

levels.

Distribution Through the IDBZ’s Retail

Banking Division (especially

designed for facility drawdowns

and repayments), the Ministry of

Finance and local building

societies (NBS).

Through their own localized Retail Banking

Division (especially designed for facility

drawdowns and repayments), their home

governments (for international projects

through inter-governmental agreements), and

other banks within their home countries.

Services offered Lending for infrastructure

projects,

Development projects for

infrastructure,

Technical advisory services,

and

Facilitates the establishment

and procurement of lines of

credit for infrastructure

projects.

Line of Credit for infrastructure projects,

Development projects for infrastructure,

Technical advisory services, and

Facilitates the establishment and

procurement of lines of credit for

infrastructure projects.

The Development Bank of Southern Africa (DBSA) has financed several feasibility studies in

many local authorities and financed projects in power generation and road rehabilitation. DBSA

is implementing these projects with support from African Development Bank. The African

Development Bank has also contributed to the multi-donor trust fund that is funding water and

sanitation projects and energy projects in Zimbabwe

21 | P a g e

By end of August 2017, there were 18 banking institutions, 16 licensed Asset Management

companies and 189 registered micro-finance institutions under the supervision of the Reserve

Bank as at 31 September 2017. The bank is facing competition from these all these institutions in

its operations. However, it also offers opportunities for synergies within the sector.

8. Company and Product Brands

In pursuance of its mandate to mobilise resources for infrastructure projects, the Bank issue

Infrastructure Development Bonds. The bonds issued by the Bank are structured as self-

liquidating instruments with clear sources of repayment in the form of ring-fenced revenue

streams that are escrowed into sinking funds especially to meet interest and capital repayments

obligations to bondholders.

The other leading brand of the Bank is the IDBZ Home Saver Account which is an innovative

product that gives the customers the power to enjoy:

Tax free credit interest of 2% per annum

Save money

This account can be used when one is saving to buy or build your first home through the

IDBZ.

9. Sales and communication The IDBZ uses the niche marketing strategy, focusing on areas on infrastructure development for

the Zimbabwean country market. This segmentation strategy is made most appropriate due to the

size of the market for such business which is small and the complexity of services provided to

this market.

A demographic profile of the IDBZ market is outlined in table below:

22 | P a g e

Table 4: Market Demographic Profile for the IDBZ

Demographic

Factor Description

Gender Persons engaged at IDBZ customer institutions may be either male or

female.

Income High income earning organizations, engaging high income earning

people and low income people.

Age Institutions at inception or maturity with personnel between the ages of

35 to 70 years.

Occupation Market made up of high level professionals and institutional decision

makers. In the housing sector some of the clients are also at the lower

end.

Education Highly educated and highly qualified persons, mostly technocrats

especially when dealing with infrastructure development. However, end

users of the projects include people with minimum levels of education.

Family life cycle Varying stages of the family life cycles.

Geographic region Market restricted within the borders of Zimbabwe.

Lifestyle This is a mixed bag of customers from affluent lifestyle, and very low

level first time home owners.

Attitudes A very cautious market that is analytical and not easily convinced.

Purchasing

Characteristics

Purchases in this market are at irregular intervals, made with long-term

commitments, and purchasing is strategic, characterised by lengthy

decision processes.

Urbanization Most institutions are represented by urban personnel but projects may

also include rural.

23 | P a g e

Religion A largely Christian nation but personnel may have different religious

backgrounds.

Table 5: The IDBZ Distribution Network

IDBZ Product/Service Customer Consumer Benefit

Infrastructure

project development

Ministry of Finance for lending to

government departments and

Parastatals.

Local Authorities and the Ministry

of Local Government for Housing

Building Society (NBS) for

Housing

ICT Companies like Liquid

Ministry of Transport and ZINARA

for transport

The Zimbabwean population

would benefit from use of

better infrastructure in:

ICT,

Energy,

Housing,

Transport, and

Water and Sanitation

Lending for

development projects

Technical

advisory services

Facilitation for

lines of credit

10. Industry trends

The World Bank has estimated that if sub-Saharan Africa’s low-income countries had an

infrastructure base equivalent to a medium income country such as Korea, average per capita

growth would be higher by 2.6 percentage points per year. Higher transportation, water, and

power costs in Africa’s low-income countries are estimated to dampen private sector

productivity by almost half —as much as crime, corruption, and limited financial market access

combined. This put the Bank at the Centre of the country’s economic transformation agenda.

According to IMF, investing in infrastructure is expensive. However, projected official

development assistance, a traditional source of budget finance in Africa, while remaining an

important source of financing, is unlikely to be sufficient to support maintaining higher public

investment levels. In Zimbabwe, due to high sovereign risk and sanctions, the traditional sources

Direct

Distribution

to IDBZ

customers

that include

all listed

above.

24 | P a g e

of infrastructure finance have since dried up. In Mozambique, Tanzania, Uganda and Uganda

there are considering other forms of infrastructure financing that include less concessional

financing from multilateral development banks and export credit agencies; more use of public-

private partnerships; and, potentially, external sovereign bond issues—as long as it does not

endanger fiscal and external debt sustainability. This is the same direction Zimbabwe is taking;

therefore, the bank has turned its focus on building strategic partnership to tap in the new market.

However due to high level of debt the country is in, non-concessional borrowing is discouraged.

Attracting foreign direct investment has had challenges due to poor ranking of the country on the

conditions of doing business as it was ranked 180 out of 190 economies on starting a business in

2018. On the overall conditions of doing business, Zimbabwe was ranked 159 out of 190

economies in 2018 down from 156 in 2010, though it is a slight improvement from 161 in 2017.

The Country Policy and Institutional Assessment (CPIA)’s score that deteriorated from 2.9 in

2015 to 2.7 in 2016.

Short termism – local institutional investors who mobilize savings for channeling to

infrastructure investments have not moved to infrastructure asset class in a substantial way.

Investors continue to have a short term preference, thus reducing appetite to invest in

infrastructure asset class which requires more patient funding to match the long gestation periods

of infrastructure projects.

Limited pool of investable funds – the size of local investable funds from the insurance and

pensions sector is restricted by the increasing contribution to arrears from sponsors. Well-funded

insurance and pension funds will be a lucrative source of funding for infrastructure projects.

Private sector lending to Government – increasing private sector lending to government has

crowded out allocation of insurance and pension sector resources to infrastructure projects

promoted by the Bank.

Bank co-financing for infrastructure project finance - investors are increasingly requesting

that the Bank invests its own equity into projects to demonstrate the Bank's confidence in the

projects. As such, the Bank has come up with a resource mobilization strategy that aims at

broadening its sources of finance and fostering strategic partnerships with development partners

25 | P a g e

to explore co-financing for infrastructure projects. The Bank targets a capital base of US$ 250

million by 2018.

Mainstreaming of climate change issues – in line with Government’s commitment to achieve

its contributions to the Paris Climate Agreement, the Bank is taking steps to mainstream climate

issues in the Bank’s project development, financing and implementation activities.

11. Managements and employees

11.1 Staff Compliment

The staff compliment as at December 2016 per job level was 96 as depicted in Table 6

below:

Table 6: Staff Compliment as at December 2016

Job Level/category No. of employees – December 2016

Managerial Level (ML) 22

Professional Level (PL) 52

Corporate Support Level (CS) 22

Total 96

The staff compliment as at January 2018 per job level is 103 as depicted in table 7 below:

Table 7: Staff Compliment as January 2018

Job Level/category No. of employees – January 2018

Managerial Level (ML) 24

Professional Level (PL) 56

Corporate Support Level (CS) 23

Total 103

The total staff compliment increased from 96 in 2016 to 103 in January 2018 due to new

staff members who joined the Bank in line with the Banks Work Programme and Budget.

26 | P a g e

11.2 Gender Distribution

The gender distribution as at December 2016 is depicted in Table 8 below

Table 8: Gender distribution of staff compliment as at December 2016

Male Female Total

Managerial Level (ML) 21 1 22

Professional Level (PL) 42 10

52

Corporate Support Level (CS) 9 13 22

TOTAL 72 24 96

The gender distribution as at January 2018 is depicted in table 9 below:

Table 9: Gender distribution of staff compliment as at January 2018

Male Female Total

Managerial Level (ML) 23 1 24

Professional Level (PL) 43 13 56

Corporate Support Level (CS) 9 14 23

TOTAL 75 28 103

12. Operations and business process (ICTU)

In 2017, the Bank engaged a consultant to review the Banks business processes for each

department, develop schematic diagrams for critical operations, ascertain the scope and

responsibilities of each function, and identify process overlaps between departments. Ultimately,

all the newly developed business processes must align with the Bank’s Policies and Operations

Manual.

The Bank has since started to develop a Delegation of Authority Matrix for the Bank; that is the

subdivision and sub-allocation of powers to subordinates to achieve effective results.

13. Facilities and premises

27 | P a g e

Table 10: The Bank Properties as at 31 January 2018

TITLE

# OF

UNITS

NATURE

OF

STAND

CURRENT

STATUS

VALUES

1 IDBZ

HOUSE

99 Rotten Row

Harare

1 Certain three piece of land

situated in the District of

Salisbury, Being

Stand 15017 (Deed of Transfer

No. 1230/88) and 383 (Deed of

Transfer No. 8214/88)and 38

(Deed of Transfer No.

9732/88)2

Measuring

1725 and 595 and 595 square

metres

(Total 2915 m2). Also

Known as 99 Rotten

Row Harare

IDBZ

Head Office

-

Offices

Rates, Water and

Electricity

Up-to date.

$2,000,000.00

IDBZ

2 Denmark Ave

Milton Park

Harare

1 Certain piece of land situated

in the district of Salisbury

Called

Stand 2603 Salisbury Township


0000503/2017)

Measuring

2631 square metres

Harare second IDBZ

Bank Offices premise

-

Rates, Water and

Electricity

Up-to date

$459,810

IDBZ

9 BROMPTON RD

HIGHLANDS

HARARE

1 Certain piece of land situated in

the district of Salisbury called

Lot 2 of Lot 381 Highlands

Estate of Welmoed,

measuring 3974 square meters


0003347/2015)

A residential Bank

Property premise ear-

marked for a guest

house, currently under

renovations

-

Rates, Water and

electricity up-to date

$200,000

Stand 789

Greystone

Township Harare

1 Piece of land situate in the

district of Salisbury measuring

7969 sq. metres

Title Deed #4108/17

A foreclosure Bank

acquisition

-

Property to rent out

-

Rates, Water and

electricity up to date

Rentals of $750 all

inclusive from 1/1/2018-

31/12/2018

IDBZ

HARARE

ENTERPRISE

CENTRE

27 Certain 2,0827 hectare (20

827m2) of land

Called

81 Willowvale Township of

A multi-tenancy Bank

industrial property

comprising of 27 factory

Units of a standard size,

$3,200,000

28 | P a g e

(HEC)

Stand 50A Willowvale

Township situated in the District

of Salisbury

(Deed of Transfer No. 8198/90)

Also

(known as 81 Woolwich Road

Willowvale Harare)

measuring 455m2.

Occupancy rate

85%

Owner

occupied

rate - 11%

Vacant rate

4%

Huge rates and water bill

left by former and

evicted tenants amount

to + USD$500,000-00.

IDBZ

CHITUNGWIZA

INDUSTRIAL

WORKSHOP

STAND

19359

TILCOR RD


the District of Goromonzi

Being

Stand 19359 Seki Township


008434/2000)

Measuring

7831 square metres

Single tenant property

premise 100% occupied.

Water and rates arrears

sits at

$ 14, 000.00.

Arrangements to pay

USD2000.00 monthly

are work in progress.

Rent for Tenant was

reduced to USD800.00

and Tenant is on

arrangement to pay USD

200.00 monthly towards

Council bills.

$130,000

IDBZ

STANDS 45

TILBURY ROAD

WILLOWVALE

T/SHIP

WILLOWVALE

1 Certain piece of land being

Situate in the district of

Salisbury Called Stand 45

Willowvale Township of lots 8

of Lot 6 Willowvale

Measuring 1,8472 hectares


5595/2016)

A foreclosure Bank

industrial property. One

part of it has been

approved for tenancy

and one has been

identified to occupy a

section.

Rates, water and

electricity are up-to date.

$1,300,000

IDBZ

MSASA

WORKSHOP

PREMISE

12 LORELEY

CIRCLE


the District of Salisbury

Called

Stand 193 Beverley East

Township 3 of Stand 218

Beverley East Township

Measuring

5986 square metres


0008574/2002)

A single tenant is in

occupation.

Monthly rent $1, 600.00

effective 1 July 2017

Rates, Water and

electricity are up to date.

$270,000

IDBZ

WESTBOURNE

FLATS

(BULAWAYO)


the District of Bulawayo, (Deed

of Transfer No.

0169/94)Measuring

Property has been closed

for tenancy as at

31/01/2018 to pave way

for major renovations as

500,000

29 | P a g e

1388 square metres,

Called

Stand 655, Bulawayo Township

Also

(known as

No. 87 Josiah Tongogara Street

Bulawayo)

the Bank needs to

diversify from general

letting of the property

IDBZ

263 LEOPOLD

TAKAWIRA

STREET

BULAWAYO

1 Certain piece of land being

Stand 1547 Kumalo Township A

of Bulawayo Township lands

situate n the District of

Bulawayo measuring 3 033

square metres


656/2016)

The Property has been

approved to be the Bank

Bulawayo Regional

Office

$114,362

IDBZ

INDUSTRIAL

FACTORY

NATHI

INVESTMENTS

REMAINING

EXTENT OF

STAND 6971A

BULAWAYO

1 Certain piece of land situate in

the district of Bulawayo called

The Remaining Extent of Stand

6971 A Bulawayo Township

measuring 2051sqm


0001524/2016)

Foreclosure Bank

Industrial Property.

There is no activity at

the premises as there is

need for major

renovations and

refurbishments before

occupancy takes place.

$120,000

NORTON

MEDICAL

CENTRE

1 No Deeds,

Title ownership being pursued

by Legal

A medical Centre project

in Norton, still under

construction.

Rates up to date

$860,000

IDBZ

TESLAT INV P/L

ELIZABETH

PARK

(RUWA)

37 Various Medium density

Residential Stands measuring

between 500m2 to 900m2 on

average

Agreement of Sale Dated

20/03/2003

The stands were

recommended for

disposal, but are not

ready to build as the area

needs to be serviced.

However, Management

approved for fencing of

the stands to hedge

against invasion and land

grabbers.

Rates are paid up to date.

$770,000

IDBZ

BEVALA INV

BORROWDALE

HILLS

3 Various Low density stands

Measuring 1.4ha on average

each

Agreement of Sale Dated

30/06/2003

The stands were

recommended for

disposal, but have not

received any takers due

to none availability of

Title Deeds and lack of

servicing of the stands

by the Developer.

$260,000

IDBZ

MORESON

FARM

CHIVHU


the District of Charter

Being

No activity. Carpentry

workshop and machinery

in place. 24 Hour

Security manning by

30 | P a g e

Moreson of Rockydale

Measuring

587,3012 Hectares

Offer Letter

Dated

23/07/2010

Fawcett Security.

However, part of the

farm has been settled by

illegal settlers and

Management is working

flat out to have the

matter resolved.

Land Rental and

Development levies were

suspended for payment

after the 1st ¼ payment

in February 2017.

IDBZ

LIVRE INV P/L

(SNAKE PARK)

23 High density stands measuring

300m2

Situate in the District of Zvimba

also known as Granary area –

Phase 6

Settlement Agreement

Dated

17/07/2015

The stands were

recommended for sale.

However, the place is

not ready to build hence

the sales are slow.

Developer has confirmed

in ability to service the

stands citing liquidity

challenges.

Rates are up to date.

$210,000

IDBZ

AGRIHOPE

FARM

MT HAMPDEN

1

Lumander Farm

Remainder of Cotebank of

Kinvarah measuring

86,6437 hectares

Deed of Transfer No.

0007321/2007

No activity. Currently

the farm is occupied by

illegal settlers.

However, rates are up to

date

$1,900,000

LOT 3A

UMGUZAN

BLOCK

NYAMADHLOVU

1 Certain piece of land being Lot

3A Block situate in the District

of Nyamandlovu measuring

564,4218 hectares

Deed Transfer 0001398/2001

Land Rental and

Development levies not

yet approved for

payment

$520,000

STAND 210

KARIBA

TOWNSHIP

1 Certain piece of land Situate in

the district of Kariba Called

stand # 210 Kariba Township

measuring 461 square metres.

Deed Transfer 0002515/2017

All bills are paid up 30,000.00

IDBZ

REMAINING

EXTENT OF

CLAY

SHANGANI

1

Certain piece of land situate in

the District of Shangani Called

The Remaining Extent of Clay

Measuring

71,7080 hectares

Land Rental and


yet approved for

payment

$70,000

31 | P a g e


1576/2004

IDBZ

LOT 1 OF CLAY

SHANGANI

1


the District of Shangani Called

Lot 1 of Clay Measuring

79,5943 hectares


1575/2004

Land Rental and


yet approved for

payment

$80,000

IDBZ

DETT VALLEY

SHANGANI

WANKIE

1


the District of Wankie Called

Dette Valley A Measuring

2 047,7735 hectares


4106/2002

Land Rental and


yet approved for

payment

$530,000

MATIDODA -

GLEN FOREST

MEMORIAL

PARK

1 Borrowdale Hills, Glen Forest

Deeds not available.

Copy of Agreement of

sale in place

$520,000

KANYEMBA

FISHING LODGE

KAROI

2

Plots 7 and 15

Kanyemba

Town Ship

Bank lodges at the

boarder of Zimbabwe

(Mbire Rural District

Council) and Zambia

LOT 14

MORNINGTON

OF FARM 1 OF

RAILWAY FARM

1, KADOMA

1 Certain piece of land measuring

1, 6187 hectares. Acquired

through a foreclosure of a bank

loan advanced to C & P.

No Title Deeds on the

property.

The issue of title transfer

is being dealt with

mutually between the

Bank and C & P P/L

NUST

PROPERTY

BULAWAYO

Consolidati

on of

stands


the District of BulawayoThe

Remaining Extent of Stands

155,156, 157,158,159 and 173 of

Matsheumhlope Measuring

1,7834 Hectres


1274/2017

Vacant land $320, 000

LOT 11 OF

ESSEXVALE

ESTATE IN THE

DISTRICT OF

UMZINGWANE

1 Title Deed 1598/91

NYAMAZI

LODGE

32 | P a g e

(SHARES)

CHRISTONBANK

FARM

ZARVIS

ENTERPRISES

P/L

T/A SCARLET

1 Footware manufacturing

JV - Disposed

14. Vendors and suppliers

In 2016, the Bank engaged a procurement consultant to revamp its procurement policies, bidding

documents and procedures. There was skills transfer on handling procurement processes to

support transparency, fairness and economic efficiency. The major milestones in procurement

the development of:

policies,

bidding documents

evaluation templates and procedures; and

training of Bank staff on application of best practice on procurement process.

In order to enhance openness, increased participation and transparency in the procurement

processes, the Bank engaged a website development consultant to create an e-procurement portal

for registration of service providers. A test version of the e-portal was uploaded on the Bank’s

website in September 2017 and went live beginning of October 2017. The expected outcomes

include policy effectiveness and organisational efficiency through better services, cost savings

and time savings.

The statistics of suppliers and contractors registered on the Banks’ e-procurement to date are as

follows:

Table 11: Statistics of IDBZ suppliers and contractors

a) Suppliers and contractors 215

b) Consulting firms 82

c) Individual consultancy 28

Total registered 325

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15. Information systems

15.1 Improvement of the Bank’s ICT systems and data management systems

The Bank strengthened its ICT Unit by increasing the level of responsibility and streamlining

reporting structures in pursuit of efficient delivery of its mandate. Notable changes to the ICT

structure included direct reporting of the Head of ICT to the CEO; this is in line with

international best practice which posits that the Head of ICT should report to the CEO or COO or

to an executive whose function does not update systems in the Enterprise IT layer. Secondly, the

Organisation and Methods [O & M] function reporting line changed from Corporate Services

and Human Resources department to the ICT Unit; services for this feature are now being

outsourced on a need basis and coordinated through the ICT Unit.

The Bank’s corporate information systems [IS] or information technology [IT] solutions can be

categorised into three layers as follows:

Enterprise Information Technology

Function Information Technology

Network Information Technology

Additional information has been for each of the categories mentioned above. Notable inclusions

are IT governance and management, and Business Continuity and Disaster Recovery; these have

been included to provide a more holistic view of the Bank ICT operations.

15.2 Enterprise Information Technology Layer

Currently, automation is limited to commercial banking activities whereas the greater part of the

Bank operates manually or employs stand-alone systems such as Microsoft Office products.

Management has since commenced processes to identify and implement systems that will

automate banking, human resources management, and project management functions. The

Bank’s Executive Management has since resolved to replace the existing core banking system

with a more robust and internationally recognised system.

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The Bank implemented the Data Platform in 2016. The platform supports the Bank’s efforts to

meet increasing demands for more timely information. The Data Platform integrates information

that exists in different locations and seeks to provide a single view of information across the

organisation. As part of the IT reforms, the Bank intends to implement integrated systems that

map directly to the Data Platform.

15.3 Function Information Technology Layer

Currently, the Bank employs on-premise Microsoft products that include word processing and

spreadsheets to mention a few. The Bank has since commenced the implementation of a cloud-

based Office 365 solution; the target completion date is 31 March 2018.

The Bank employs a Linux-based email solution with limited functionality. Management is

currently considering migrating to a cloud-based solution, Office365, with enhanced email

functionality and new applications. The new configuration and additional applications will

increase available communication channels, collaboration, system availability, recoverability,

and lower the cost of ownership of these technologies. The Bank’s strategy regarding these

technologies is to achieve a unified communication and collaboration environment or the use

various communication methods such as text, audio, video and virtual whiteboards and make

them available through a single interface.

Other solutions due for implementation in 2018 include Teammate [an audit management

solution], and a Digital Imaging and Archiving solution.

15.4 Network Information Technology Layer

In 2016, the Bank engaged a Consultant to conduct a network vulnerability assessment on its

network; the results have since been used to fortify its network infrastructure. The Bank also

implemented a Wi-Fi network which has reduced the need for wired cabling and related

maintenance costs to a minimum. The decision to implement Wi-Fi has also encouraged

management and senior staff to multi-task, and work more efficiently. Steps to enhance the

effectiveness of the Bank’s Local Area Network [LAN] and Wide Area Network [WAN] are on-

going.

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15.5 IT Governance and Management

In 2016 the Bank engaged an independent consultant to review Bank’s ICT policies, and one of

their recommendations was that the Bank should adopt a formal IT Governance and

Management framework. Consequently, the Bank’s Executive Management formally approved

the adoption of the COBIT5 framework.

15.6 Business Continuity and Disaster Recovery

In 2014, the Bank developed a new site for its disaster recovery. Currently, the site is

operational; however, it will be impacted by the changes that were highlighted in earlier sections;

there will be need to adapt the disaster recovery site to the evolving business requirements.

In 2017, the Bank commenced the development of a recovery site for its business units in Milton

Park, Harare. In the event of a disaster, the Bank will be able to provide minimal services to its

clients from the new location. However, it should be noted that as the Bank continues to grow its

human capital and infrastructural requirements will also continue to increase; this will necessitate

the need for periodic reviews on the adequacy of the site to be undertaken and where necessary

the requisite interventions.

16. Proprietary Technology and Intellectual Property (ICTU) Nil.

17. Legal, Regulatory and Environmental IDBZ is a successor to the Zimbabwe Development Bank (ZDB). The Zimbabwe Development

Bank Amendment (Act 11 of 2005), replaced the ZDB with IDBZ and in terms of that amending

Act, IDBZ assumed all the rights and obligations of the defunct ZDB. IDBZ is a development

finance institution established in terms of section 3 of the Infrastructure Development Bank of

Zimbabwe Act [Chapter 24:14] (the IDBZ Act). The Bank’s shareholding, constitution and

powers are all defined by the IDBZ Act. In addition, the Bank’s administration is subject to the

Public Finance Management Act, [Chapter 29;19] the Corporate Governance Framework for

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State Enterprises, the Public Procurement and Disposal of Public Assets Act [Chapter 22;23] and

the Banking Act. The Bank, through the Public Procurement and Disposal of Public Assets Act

is subject to the Procurement Regulatory Authority of Zimbabwe (PRAZ). The Bank is also

regulated by the Reserve Bank of Zimbabwe through the Banking Act [Chapter 24;20], although

only specific provisions of the Banking Act apply to the Bank. The Bank is also a member of the

Deposit Protection Corporation of Zimbabwe (DPC). The Bank has a Corporate Governance

Charter which captures the salient features of the Public Finance Management Act, the Corporate

Governance Framework for State Enterprises and the National Code on Corporate Governance in

Zimbabwe (ZIMCODE) as well as the King III Code on Corporate Governance

Figure 7: Establishment of the IDBZ, Corporate Governance: Framework, Charter and Code of

Conduct, IDBZ, 2016

Financial section

IDBZ - The Bank

• DFI - focuses on infrastructure sectors

• Energy, Water and Sanitation, Transport, ICT and Hosuing Values -

• Integrity,

• Professionalism,

• Innovation,

• Service Orinetation,

• Sustainability,

• Knowledge Generation and Sharing.

Governance Frameowk

• Established in 2005 - IDBZ Act [Chapter 24:14 ]

• Was regulated by the MoFED.

• Now also under RBZ Supervison.

• Finance Act Number 3 of 2014 which amended the Banking Act [Chapter 24:20]

• Sections of the Banking Act that will apply to IDBZ are stated in General Notice 115 of 2017.

• Member of the Depositor Protection Corporation (DPC).

Corporate Governance Charter

•Consolidation of:

•relevant provisions of the IDBZ Act [Chapter 24:14],

• the Public Finance Management Act [Chapter 29:19],

• the Corporate Governance Framework (CGF) for State Enterprises

•Parastatals and the IDBZ Shareholder Regulations.

Code of Conduct and Ethical Framework

• The Code of Ethics Policy provides a framework under which Directors, staff and people who interact with the Bank are expected to conduct themselves.

• The Code is designed to promote honest and ethical conduct and is founded on the Bank’s core values.

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