The Development Bank of Southern Africa (DBSA) has signed a US$206 million loan agreement with Zimbabwe for that country's road infrastructure development.
The facility, the largest granted by DBSA to Zimbabwe, will be released in three batches, with the first US$54 million already at work.
In a statement, the DBSA said the loan was for the rehabilitation of a major road artery from Plumtree, through Harare, to Mutare and Beit Bridge, spanning 801km.
The money is to be disbursed through the Zimbabwe National Roads Administration (ZINARA).
The local ministers of Transport, Communications and Infrastructural Development and Finance represented Zimbabwe at the signing ceremony.
DBSA chairman Mr Jabu Moleketi said the bank was at an advanced stage in considering several other priority infrastructure projects in Zimbabwe. "The bank´s loan financing for this pioneering road rehabilitation project in Zimbabwe is a clear expression of South Africa´s commitment to Zimbabwe´s reconstruction and recovery effort, and regional economic integration," he said.
DBSA said the loan was the second biggest loan granted by the bank outside South Africa and would give a much-needed boost to Zimbabwe´s transport sector.
Zimbabwe's Transport, Communications and Infrastructural Development Minister Nicholas Goche said the rehabilitation of these key arterial roads would not only streamline trade flows from and to Zimbabwe, but would reduce road maintenance costs, vehicle maintenance and operational costs, journey times, congestion and road accidents along the busy route.
His counterpart, Finance Minister Tendai Biti, said the road project would be a "game changer", ushering in a new era of re-investment in the country´s economic infrastructure, creating jobs and boosting economic efficiency.
"This particular road project alone will create some 800 skilled and semi-skilled construction jobs and reflects the growing confidence of African and international investors in Zimbabwe´s future," he said.
In 2010, the bank disbursed its first development loan of US$20 million for a revolving input credit scheme for small-scale farmers through a co-operative business partnership that provides both credit and capacity building to some 127 000 growers on 242 000 hectares.