Rikus Grobler | Oct 18, 2017 | 0
Bank participates in Zimbabwean infrastructure loan
The facility makes up 10% of the Engineering, Procurement and Construction costs for the expansion project, with China Exim Bank providing the balance of 90%. The China Exim funding was provided on condition that the Chinese company, Sinohydro, be appointed as contractor.
“The facility is significant in its contribution to increasing its power generation in southern and central Africa,” said Amit Mohan, Head of Corporate Banking at Standard Bank Namibia. “The execution of this innovative finance structure was the result of Standard Bank’s local presence in both jurisdictions and its strong relationships with key stakeholders,” he explained.
The structure of the facility is cross border, placing reliance for repayment on a long term Power Purchase Agreement (PPA) between the Zimbabwean power generator and NamPower. Standard Bank said ZPC has a long track record of delivering power to NamPower. The power purchase agreement provides a long term and sustainable cash flow stream to ZPC, enabling the entity to raise further funding for new projects and rehabilitation of existing infrastructure.
“It was an ideal opportunity for the bank to get involved [in power]. NamPower buys power from ZPC and therefore it was important for us to support our power sector through this loan facility,” said Mohan.