ZPC bond bears fruit for expansion project | The Herald March 21, 2016
INVESTORS have subscribed to half of the ZPC $50 million bond meant to raise funds to support expansion of power generation, information availed to the Herald Business shows.
Known as the ZPC bond, proceeds are meant to support the Zimbabwe Power Company expansion of power generation and pays a coupon rate of 9 percent per annum.
The Infrastructure Development Bank of Zimbabwe first issued the five-year bond in 2014 on behalf of ZPC but because it was not fully subscribed, it was re-issued in November last year. The ZPC bond is available for investment under private placement.
Projects targeted to be financed from the money raised are the re-powering of Harare Power Station ($11,2 million) and refurbishment of Kariba Power Station ($38,8 million.)
It is structured as a self-liquidating instrument with a clear source of repayment in the form of ring fenced revenue streams from electricity sales that are escrowed into a sinking fund to meet interest and capital repayment obligations to bondholder investors.
IDBZ launched the first tranche of energy bonds in 2012 worth $30 million to finance the prepaid metering project by the Zimbabwe Electricity Transmission Distribution Company, which was fully subscribed.
This has helped ZETDC, the distribution subsidiary of Zesa Holdings to boost revenue collection and enhance its creditworthiness.
The $30 million ZETDC bond issued in October 2012 was a three-year instrument and matured in December.
In November 2014, the IDBZ also issued a five-year medium term note worth $15 million, which was fully subscribed, to fund the completion of the ZETDC metering project.