IDBZ to float bonds worth $240m

via IDBZ to float bonds worth $240m November 18, 2014

THE Infrastructure Development Bank of Zimbabwe (IDBZ) says it plans to float bonds worth $240 million by end of 2015, including a Zesa Holdings bond set to be issued before end of year.

IDBZ infrastructure projects director Desmond Matete said the bank would go into the market to raise $65 million required to fund the energy sector this year.

A bond is a debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing.

IDBZ head of projects, corporate and structured finance Tonderai Nhika said the refurbishment of Kariba South Power Station would require $38,8 million while the repowering of Harare Power Station would cost $11,2 million.

“The $15 million and $50 million bond will have a 8% interest per annum and both local and foreign investors are eligible,” he said.

Nhika said the $15 million would be for the hardware, labour costs, pole mounting, meter testing and labour variations on completed works.

Nhika said the State Procurement Board had awarded a Engineering Procurement Construction (EPC) contract to Jaguar Overseas limited (India) and the total cost is $70,2 million.

“EPC will provide $58,98 million while Zimbabwe Power Company’s contribution will be $11,2 million (6% insurance and 10% own contribution). The $11,2 million will unlock the EPC concessionary loan from India Eximbank,” he said.

Nhika said the bank raised $30 million for the completion of the prepaid metering project in 2012 and it raised $30 million.

Nhika said up to date 90% of prepaid meters have been installed translating to 466 814 meters from 519 859 meters. He said there were variations that were experienced due to labour rates variations, 35% mandatory National Employment Council increments, pole mounting and enclosures and others

The country has an installed capacity of 1 950 megawatts and current supply is 1 300megawatts.

Matete said there is a lot of work to be done on the future bonds that include rehabilitating the railways tracking system, and finishing Tokwe Mukorsi dam.

“We have been given treasury approval of up to five years and the bond will be $100 million. We will have an emotional instrument with good returns for state universities Midlands State University (MSU), Bindura and Great Zimbabwe.MSU is a case to focus on. They are viable projects,” he said.

Matete said a $50 million bond will be floated for Tokwe Mukorsi to finish the dam wall.

“Railways require a total of $635 million. This is just a market teaser $25 million. These are future issues in the next 12 months you will hear from us,” he said.