THE Development Bank of Southern Africa (DBSA) will this month take the $150 million Zimbabwe Power Company (ZPC) and Namibian power utility (Nampower) deal to the board for approval.
BY VICTORIA MTOMBA
In an interview with NewsDay on the sidelines of the Programme for Infrastructure Development in Africa (PIDA) last week, DBSA group executive (International Finance) Moe Shaik said the bank was encouraged by developments in Zimbabwe where foreign investors were coming to the country because no economy can survive without foreign investments.
“We have completed the due diligence and the appraisal report is going to our board for approval this month,” Shaik said.
A ZPC official said the ZPC Nampower deal is on course and the work has commenced after Standard Bank gave them $50 million bridging finance for the extension project.
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“The bridging finance would be refinanced when the $150m has been secured. But we did not give DBSA the facility, we are dealing with Standard Bank,” the official said.
He said the deal was on course and Nampower was getting power from ZPC.
ZPC and Nampower signed the $150 million power purchase agreement in 2014 to securitise a loan for the expansion of the hydro electric plant in Kariba. Chinese firm Sino Hydro won the contract to expand Kariba by 300MW at a cost of $500m and the project would be completed in 2017.
Through the deal, ZPC would sell power to NamPower and they would pay as they consume the power. The $150m was for the purchase of 80megawatts which will be at a load factor, which means on average it will be 40 MW.
ZPC is owned by Zesa Holdings and is in charge of power generation at Hwange, Kariba, Munyati, Harare and Bulawayo power stations. The deal is a second power purchase agreement between ZPC and Nampower. ZPC in 2007 signed a power agreement with Nampower, which gave Zesa $40m to refurbish Hwange thermal power station and the debt was paid through the export of 100MW during peak periods and 150MW off peak to Namibia daily for five years.
Meanwhile, Shaik said the DBSA was also working with government on a railway project estimated to cost $477m.
“We are in discussions with the government and we will not fund the whole amount, but part of it and we hope by December or January we will complete the discussions and the issue has not gone to the board as yet,”he said.
Shaik said the bank would be the lead arranger in raising the money for National Railways of Zimbabwe and would raise funds on behalf of Zimbabwe.