—largest IFC investment in African financial institution—
HARARE, ZIMBABWE, June 11, 1998 --- The International Finance Corporation today signed a financing agreement to invest a total of US$27.8 million in the privatization of Commercial Bank of Zimbabwe (CBZ), the largest state-owned bank in the country. IFC’s financing consists of a loan for its own account of US$20 million and an equity investment of US$7.8 million, representing 15 percent of CBZ’s share capital. This transaction completes the privatization of CBZ in partnership with Amalgamated Bank of South Africa (ABSA), the largest financial services group in South Africa, which would become CBZ’s technical partner.
The privatization of CBZ will enable it to become an important financial player in southern Africa as well as one of the largest, best capitalized, and best managed financial institutions in Zimbabwe. It will offer Zimbabweans greater access to modern and efficient financial services and increase competition and efficiency in the financial sector. CBZ’s partnership with ABSA will assist in processing cross-border transactions and in establishing links with other institutions in the region, thus facilitating regional financial integration -- a key IFC strategic objective.
In addition, IFC’s investment will provide long-term financing to CBZ for onlending to Zimbabwean export-oriented enterprises in the areas of agro-processing, tourism, mining, and the services sector.
Mr. Cesare Calari, Director of IFC’s Sub-Saharan Africa Department said the completion of CBZ’s privatization would serve as a model for future bank privatizations of financial institutions throughout Africa.
The agreement was signed by Mr. Gideon Gono, Managing Director and CEO of CBZ; Mr. Jean Brown, Group Executive Director, ABSA; Mr. Nathie Bosman, Group Managing Director and CEO, ABSA; and Mr. Bahadurali Jetha, Manager, Capital Markets in IFC’s Sub-Saharan Africa Department. H.E. Dr. H.M. Murerwa, Zimbabwe’s
Minister of Finance; Mr. Gareth Ivorian-Jones, IFC Acting Resident Representative in Harare; and Mr. Mengistu Alemayehu, IFC Investment Officer were also present at the signing.
IFC’s involvement in Zimbabwe’s private sector includes making investments and providing advisory services in agribusiness, tourism, financial services, and the small and medium enterprises sector. The Corporation’s investment portfolio in Zimbabwe is the second largest in Africa. To date, IFC has invested a total of US$100 million in over 30 projects in the country.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to government and businesses.
