Pan-African bank Standard Bank has finalised a $120 million debt package with Zimbabwe Power Company (ZPC), for the rehabilitation of existing power infrastructure at Kariba and Hwange.
BY BUSINESS REPORTER
ZPC generates electricity at Kariba hydro and Hwange thermal power stations. As the lead arranger, the bank partnered with PTA Bank to deliver the financing. A lead arranger is the investment bank or underwriter firm that facilitates and leads a group of investors in a syndicated loan for major financing.
The bank said the transaction was a continuation of a previous funding arrangement with ZPC, which went towards their contribution into the 300MW expansion at Kariba South Hydro Power Station.
Tandiwe Njobe, Standard Bank’s regional head (Investment Banking) said the funding would assist in “improving access to power for Zimbabwe and Namibia, and in the medium-to-long-term benefits of improved power supply and reliability will also extend to other Southern African Power Pool members”.
The facility is cross-border, placing reliance for repayment on a long-term power purchase agreement (PPA) between ZPC and Namibian power utility, Nampower.
ZPC, the bank said, had a long track record of delivering power to NamPower. The PPA provides a long-term and sustainable cash flow stream to ZPC, enabling the entity to raise further funding for new projects and now for the rehabilitation of existing infrastructure.
Standard Bank said the deal speaks to the bank’s “ongoing commitment to use its on-the-ground presence and expert capabilities across Africa to finance the development of power and infrastructure projects throughout the continent”.
“This is a landmark transaction in which we could leverage our sector and technical expertise in both markets, as well as our understanding of the regional power dynamics and local regulatory environments, to deliver value to ZPC and NamPower. To make this transaction work we engaged with four regulatory bodies and key policymakers in four ministries in Namibia and Zimbabwe,” Njobe said.
She said the facility was “significant in its contribution to increasing power generation in a region which has an on-going deficit and a clear need for dependable and sustainable power supply”.