The Infrastructure Development Bank of Zimbabwe has signed a memorandum of understanding with Wah Kong Enterprises Limited (WKEL), which will see the Chinese firm partnering the bank to implement university students and staff accommodation projects.
WKEL, which is already doing projects in Zambia, is a subsidiary of Jiangxi Construction Engineering Corp, one of the leading state-owned contractors in China.
WKEL has proposed to implement selected student and staff accommodation projects under Engineering Procurement Construction (EPC) contract financing model, whereby WKEL as the main contractor will arrange long-term debt to finance the projects.
The project will be handed over to the bank upon completion. The first phase of IDBZ’s university accommodation project will involve the construction of students halls of residence at Lupane State University, National University of Science and Technology and University of Zimbabwe.
The main objective of the project is to provide students accommodation at four of Zimbabwe’s eleven (11) state universities. When completed, the projects will directly benefit nearly 4 000 students.
It is the proposed that the Zimbabwean project promoter will contribute at least 15 percent of the total funding requirements, as a pre-condition for release of principal project funds.
Therefore, once indicative terms of the Chinese loan, particularly the interest rate, grace period, tenure and repayment terms are known, the IDBZ will engage local institutional investors who can come in as equity partners, or through a combination of equity and debt capital, to provide the local funding component, IDBZ said.