Namibia's utility is planning a bond sale in it's own country as well as in South Africa to raise funding for its share of a $1.2-billion gas plant.
Namibia Power Corporation is seeking to sell a bond in the country and neighbouring South Africa early next year to raise cash for transmission projects and its share of capital in the planned 800-megawatt Kudu gas-fired plant.
The southwest African nation’s utility plans to raise 5.5-billion Namibian dollars ($514-million )through borrowings, and a bond would be a “significant” part of that, Nampower chief financial officer Hanri Jacobs said in an emailed response to questions on Monday.
“It all depends on market appetite and the offering,” he said. FirstRand Ltd.‘s Rand Merchant Bank unit will arrange the sale, Jacobs said.
Nampower needs to raise money to finance its share of investments in the planned $1.2-billion plant, which will use natural gas from the Kudu fields off Namibia’s southern coast. The utility, which last year suffered a 21% decline in output from its Ruacana hydropower plant because of dry weather, is a net electricity importer and says supplies will remain critical until Kudu comes on the grid in 2008.
Nampower owns 51% of Kudu while Zambia’s Copperbelt Energy Corporation has a 30% equity stake. The remaining shareholding is up for sale, Managing Director Paulinus Shilamba said on May 6.
The utility also plans to obtain finance from lenders it has used in the past, which include the European Investment Bank, Germany’s state-owned KfW Group and France’s Agence Francaise de Developpement, Jacobs said.
“Funding from development-finance institutions will depend on the cost of borrowing that these institutions will offer to Nampower,” he said.– Bloomberg