Advocate Martin Dinha, the Chairperson of the National Railways of Zimbabwe (NRZ) has said the company has received the submissions for funding made towards the US$400 million recapitalisation project by the Diaspora Infrastructure Development Group (DIDG)/Transnet Consortium.
The Chairman said the NRZ now awaits guidance from Treasury on the availability of the said funding, subject to such guidance as may be given by Government, the project may be progressed in terms of the provisions of the Government’s Joint Ventures Act.
In a meeting held by the NRZ Board on 09 September 2019, to consider the report from the Special Joint Plenary session by the partners in the negotiations, the rail entity resolved to recommend to Government to pursue the offer of US$420m funding.
The consortium said: “The offer/proof of US$420 million funding from DIDG through Afrexim Bank be referred to Treasury to pursue and consider, inter alia, the availability of the said funding.
“The NRZ should await guidance from Treasury on the availability of the said funding where after, subject to such guidance as may be given by Treasury, the project be progressed in terms of the provisions of the Joint Ventures Act as previously directed by Cabinet communicated to NRZ through the letter from the Minister of Transport and Infrastructure Development dated 16 October 2017 to the NRZ”.
This comes after a special joint plenary meeting of Government of Zimbabwe/NRZ and DIDG/Transnet Consortium on 30 August 2019 in which DIDG submitted on offer of US$420 million (US$400 million for recapitalisation and US$20 million for working capital) through Afreximbank (as the Mandated Lead Arranger).
DIDG/Transnet Consortium, in that meeting, further reported that they had also secured requisite shareholder approvals. DIDG has therefore since written to the joint plenary meeting of the NRZ deal negotiations team expressing their readiness to proceed with the project in partnership with NRZ.
In February 2019, the Zimbabwean Government made a decision to extend the NRZ recapitalisation framework agreement by 6 months to 14 August 2019 to give enough time for the DIDG/Transnet Consortium to, among other requirements, demonstrate capacity to raise US$400 million for the NRZ recapitalisation project (proof of funding for the project) and submit proof of shareholder approval to set the ball rolling in the recapitalisation project.
The NRZ embarked on the recapitalisation project in 2017 leading to the pre-bid conference which attracted over 80 investors who were then adjudicated and subsequently resulted in the DIDG/Transnet Consortium winning the bid. Since then negotiations have been going on to ensure the deal is concluded.