HARARE, (The Southern African Times) – The European Investment Bank has agreed to support EUR 15 million of new long-term financing for entrepreneurs and businesses across Zimbabwe in cooperation with leading local bank CABS. The first ever partnership between the European Investment Bank, the world’s largest international public bank and CABS, will extend loan tenors and increase access to USD by businesses in the country.
The new private sector financing will help companies most impacted by COVID-19 and is part of the EIB’s rapid response across Africa to strengthen economic resilience to the pandemic.
The new EIB – CABS cooperation to support business investment in Zimbabwe was formally announced during a virtual ceremony in Harare earlier today by Mehluli Mpofu, Managing Director of CABS, European Investment Bank Vice President Thomas Östros, EU Ambassador Timo Olkkonen and new EIB regional representative for southern Africa Jim Hodges.
“Companies and communities across Zimbabwe have been impacted by the COVID-19 pandemic. CABS is committed to supporting private sector investment in Zimbabwe and enabling our corporate, business and agricultural clients to invest for the future and create economic opportunities. The new EUR 15 million European Investment Bank backing for CABS will unlock new private sector financing to be provided by our branches across the country to private businesses. The close cooperation between CABS and EIB financial experts over recent months will transform access to longer term loans in foreign currency essential for Zimbabwean businesses to grow during challenging times and ensure that Zimbabwe benefits from the EIB’s rapid response to strengthen economic resilience to COVID across Africa.” said Mehluli Mpofu, Managing Director of CABS.
“Ensuring access to finance by Zimbabwean entrepreneurs and businesses is crucial to overcome business uncertainties and economic challenges enhanced by COVID-19. As part of Team Europe, the European Investment Bank is pleased to provide EUR 15 million of new targeted financing to CABS to unlock new private sector financing essential to strengthen private sector investment, create jobs and accelerate the post-pandemic recovery of Zimbabwe. Today’s new agreement demonstrates how Team Europe and African partners are joining forces to beat COVID and help business flourish.” said Thomas Östros, Vice President of the European Investment Bank.
“The European Union is committed to supporting the private sector in Zimbabwe. The new EIB cooperation with CABS will boost investment as it will increase access to targeted business finance by companies across Zimbabwe. By helping private sector resilience to the new EUR 15 million financing scheme will create jobs, unlock business growth and contribute to alleviating poverty in the years ahead.” said Ambassador Timo Olkkonen, Head of the European Union Delegation to Zimbabwe.
Supporting investment by Zimbabwean businesses during challenging times
The 7 year EUR 15 million EIB loan to CABS will allow new financing to be provided to private businesses, notably SMEs, across Zimbabwe.
The new financing will allow longer average loan tenors for business loans and enable companies to better reflect the economic life of new investment.
Under the initiative, CABS will provide financing in USD to eligible private sector clients across the country.
The new business financing will also help companies to strengthen competitiveness of Zimbabwean companies.
Ensuring Zimbabwe benefits from rapid EIB response to strengthen economic resilience to COVID
The new EIB – CABS cooperation represents the EIB’s first ever support for business investment in Zimbabwe with a commercial bank.
The scheme is part of the EIB’s increased engagement across Africa to ensure that companies can continue to access finance when faced with unprecedented health, business and trade challenges linked to COVID-19, approved by European Union finance ministers in April 2020, within weeks of the impact of the pandemic being recognised.
First EIB engagement in Zimbabwe in 22 years
The EIB financed energy, water telecom and industrial investment in Zimbabwe between 1982 and 1999.
The European Investment Bank is the world’s largest international public bank, owned directly by the 27 European Union member states. Last year the EIB provided more than EUR 4.7 billion for private and public investment across Africa.