Standard Bank extends $120mln for ZPC power stations
HARARE – Regional finance institution, the Standard Bank in partnership with the Eastern and Southern African Trade and Development Bank (PTA Bank) has availed a $120 million debt package to the Zimbabwe Power Company (ZPC) for the rehabilitation of existing power infrastructure at Kariba South Hydro Power Station and Hwange Thermal Power Station.
Standard Bank as mandated lead arranger for the facility partnered the PTA Bank to deliver the financing which is a continuation of a previous funding arrangement with ZPC which went towards the contribution into the 300MW expansion at Kariba South Hydro Power Station.
Regional Head: Investment Banking, at Standard Bank Tandiwe Njobe in a statement said access to energy remains critical to the future growth potential of sub-Saharan Africa, yet power supply remains extremely limited across large parts of the region.
“This funding will 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 (SAPP) members.
“The proceeds will be applied to significant capital expenditure which will increase capacity and improve efficiency of the power stations,” she said, adding that “without reliable access to power, industry and economic growth are negatively impacted.”
Njobe said while raising finance remains a challenge in sub-Saharan Africa, the ZPC deal speaks to Standard 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 Namibia Power Corporation, (NamPower). To make this transaction work we engaged with four regulatory bodies and key policy makers in four ministries in Namibia and Zimbabwe,” she said.
The facility is cross border, placing reliance for repayment on a long-term Power Purchase Agreement (PPA) between ZPC and NamPower. ZPC has 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.
Njobe said Standard Bank has a long-standing relationship with ZPC as their primary banker, and with NamPower, which ultimately benefited all parties to the transaction.
“It was important for us to support the regional power sector through this loan facility. The facility is 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,” she said.
Standard Bank Group is the largest African bank by assets with a unique footprint across 20 African countries, Headquartered in Johannesburg, South Africa, where it listed on the Johannesburg Stock Exchange.