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About 750 stands have already been allocated to members of the Zimbabwe Energy Workers Union, Zimbabwe Teachers Association and Homeseekers Incorporation (Pvt) Ltd

Martin Kadzere Senior Business Reporter
HWANGE Local Board in partnership with the Infrastructure Development Bank of Zimbabwe intends to raise as much as $6 million to service about 2 000 high density residential stands measuring 200 square metres each in the suburb of Empumalanga.The scope of work includes roads, sewer network, electricity distribution and water reticulation infrastructure. The project site is owned by Hwange Local Board and project will be implemented through an unincorporated SPV. Two thousands stands will be available for sale and 135 will be allocated to Hwange Local Board.

According to IDBZ serviced stands will be delivered at $15,32 per sqm and sold at $20,70 per sqm. The project will also involve rehabilitation of Empumalanga Waste Water Treatment Plant.

About 750 stands have already been allocated to members of Zimbabwe Energy Workers Union, Zimbabwe Teachers Association and Homeseekers Incorporation (Pvt) Ltd. Hwange has an estimated housing backlog of 9 000 which provides offtake potential.

Beneficiaries would be required to pay an upfront deposit of 10 percent and the balance to be repaid over six year at an interest rate of 10 percent per annum, translating to monthly instalments of $65 per stand. The project would be funded through a combination of debt and participating preferred capital (5 percent + 15 percent of profits.

Investment can also be made through the IDBZ Bond or directly into the project SPV through Participating Preferred Capital. The five year tenure bond will have a fixed coupon of 8,5 percent, tax exemption, prescribed asset status and the Government guarantee.

Ring-fenced receivables from sale of stands on the Project will be ceded to bondholders and escrowed into a sinking fund for purposes of meeting interest and capital payments throughout the tenure of the bond, guaranteed by the Government.

Hwange is one of the oldest towns in Zimbabwe having originated from settler mining at the beginning of the last century. Its growth has generally been driven by coal mining activities by Hwange Colliery Company and power generation by Zesa Holdings.

As a result of population growth, the town expanded to become a major district centre performing regional functions that are administrative and commercial in nature.

For years, Hwange Colliery Company Ltd has been operating like a local authority offering services such as water and sewer reticulation, health facilities, housing, waste collection of most of the compounds as well as well as sports and recreational facilities, services divorced from its core business. However, the prevailing operational challenges facing the company has seen it failing to sustain the provision of the services.

Due to the overlapping administration and land ownership by Hwange Colliery, the local authority only provides services to two suburbs namely Mpumalanga and Baobab.

The Government is already creating a framework that will compel other coal miners around Hwange to participate in development of the town. This relates to infrastructural development and provision of housing, education and health facilities.