Business Reporter
THE Infrastructure Development Bank of Zimbabwe’s five year $50 million energy bond issued last year was not fully subscribed and is still available for subscription.
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 bond still has significant headroom and is thus currently available for investment under private placement,” the State-controlled bank said in a statement yesterday.
Projects targeted to be financed from the money raised are the re-powering of Harare Thermal Power Station ($11,2 million) and refurbishment of Kariba South 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.”
The bank said it has taken a deliberate approach to prioritise the financing and expansion and rehabilitation of energy projects to mitigate the prevailing power deficits. 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 3-year instrument and will mature next month. “To date, the bond has performed according to the indicated payment terms with no incidence of missed or delayed payments,” said IDBZ.
In November last year, 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.
The bank, whose statutory mandate is to promote economic development through financing and managing the development of infrastructure projects including roads, energy, dams, water reticulation, amenities and utilities has in the past few years implemented housing projects and will issue a $100 million bond to raise funds for housing development.