Approximately $193 million in offshore loans was recently obtained for the construction of hospitals and clinics in Zimbabwe. The loan is part of a deal with UK infrastructure company NMS.
Zimbabwe currently has struggling healthcare facilities. The project, which will see the establishment of five 80-bed district hospitals as well as thirty 20-bed clinics, is thus significant.
The transaction will be covered by the Export Credit Insurance Corporation of South Africa, with ABSA and Standard Bank of South Africa acting as joint arrangers.
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With a $25 million initial investment, the Zimbabwean government established clinics in Harare’s Stoneridge and Bulawayo’s Cowdray Park.
How the construction of hospitals and clinics in Zimbabwe is funded
To secure the backing of the foreign banks, Zimbabwe would deposit $35 million in SDRs from the IMF as cash cover in an offshore SDR escrow account. The loans will be settled with a further $2.5 million in monthly royalty payments. GKB Ventures and Sullivan & Worcester from the UK are offering project expertise.
Other NMSI healthcare projects in Africa comprise a $300 million contract in Zambia and a €326 million project in Ivory Coast. It also has projects for $175 million in Ghana. To minimize costs, these projects make use of prefabricated steel frame structures in their designs.
The underlying Built to Care rural healthcare project is a top national priority. This financing package is very significant for Zimbabwe. Head of the Aid and Debt Management Office at the Ministry of Finance, Andrew Bvumbe, also stated that they are committed to it and will provide the funding for it.
This structured funding ushers in an intriguing re-emergence of Zimbabwe in the global capital markets. It also ushers in the project for the provision of quality healthcare infrastructure for the citizens of Zimbabwe. Additionally, it represents a good example of the effective combination of government, industry, and also the financial services sector delivering excellent outcomes. This is according to ECIC, Absa, and Standard Bank.
