IDBZ to raise $30m for Zesa prepaid meters

 

ZETDC has embarked on a massive project to install prepaid meters for domestic and industrial consumers.

IDBZ said the tender for the infrastructure bond that would earn a net coupon rate of 10 percent per year paid half yearly, will close at the end of next month.

The principal source of repayment for the bond will be the operating cash flows                               from the ZETDC.

Features of the bond include the prescribed asset status, tax exemption status, liquid asset status, government guarantee as well as tradable and lender of last resort status.

“The prescribed asset status will assist pension funds and insurance companies to comply with statutory portfolio guidelines,” said IDBZ in a statement.

It will also assist in redirecting domestic capital towards infrastructure, which is a key enabler in the economy and a prerequisite for sustained domestic economic recovery and regional integration.

It is hoped that the $30 million bond will be tradable on the secondary market and the lender of last resort security enables holders to secure overnight borrowing from the Reserve Bank of Zimbabwe.

An economic commentator Mr Peter Mhaka said the issuing of the infrastructure development bond was a step in the right direction as it seeks to improve consumer welfare and economic growth.

“The installation of prepaid meters will result in customers receiving bills based on                        actual usage eliminating situations where electricity consumers have lodged complaints over inflated bills which are based on estimates,” he said.

He said the installation of prepaid meters would also enhance the power utility’s debt management.
Zesa has said it is owed more than $500 million by domestic and industrial consumers.

“If installed, prepaid meters will result in increased cash flow and reduction of credit risk by Zesa, a development that will promote economic growth if the revenue generated can be invested in power generation projects to improve power supply in the country,” he said.

Zimbabwe presently produces 1 600 megawatts against a national demand of 2 200 MW.