CABS/ European Investment bank unveil EUR 15 million covid resilience facility

CABS/ European Investment bank unveil EUR 15 million covid resilience facility

Staff Reporter

HARARE, THE European Investment Bank (EIB) has agreed to support EUR 15 million of new long term financing for entrepreneurs and businesses across Zimbabwe in cooperation with the 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 Ostros, 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 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 sector 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 essential to overcome business uncertainties and economic challenges enhanced by COVID – 19 .

As part of Team Europe the European Investment Bank is pleased to announce EUR 15 million of the new targeted financing to CABS with the aim to provide liquidity and sustain jobs amid the pandemic, and to strengthen private sector investment and create jobs in the post – pandemic recovery of Zimbabwe.

Today’s new arrangements demonstrate how Team Europe and Africa partners are joining forces to beat COVID and help business flourish,” said Thomas O`stros, Vice President of the European Investment Bank.

“Team Europe is committed to supporting private sector investment in Zimbabwe. The new EIB cooperation with CABS will increase access to targeted business finance by companies across Zimbabwe. By helping private sector resilience to COVID-19 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.

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 a d enable companies better reflect the economic life of new investment.

Under the initiative, CABS will provide financing in USD or EUR 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 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.

This also comes as 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 by directly by the 27 European Union member states. Last year the EIB provided provided more that EUR 4.7 billion for private and public investment across Africa.

The European Investment Bank (EIB) is the long term lending institution of the European Union owned by its Member States. It makes long term finance available for sound investment in order to contribute towards EU policy goals