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WINDHOEK. — Namibia Power Corporation plans to raise US$496 million in bonds and loans to expand its transmission networks and invest in generation. The funds will go toward NamPower’s 13 billion-Namibian-dollar investment programme over the next five years, managing director Paulinus Shilamba said in an interview. The balance will come from its own cash reserves.
NamPower needs money to finance its share of investment in a planned US$1,2 billion power plant that will use natural gas from the Kudu fields off southern Namibia. The utility, which has suffered a 70 percent decline in output from its Ruacana hydro plant because of a drought, is also in talks to import more electricity from Zambia, Mozambique and Zimbabwe.
“The power supply situation in Namibia will remain critical until the commissioning of a base-load power station in 2018,” Shilamba said, referring to the 800-megawatt Kudu plant.
NamPower will tap its traditional financiers for the funding, the director said, citing the European Investment Bank, Germany’s KfW Group and the French Development Agency.
“From next year onwards we have to start raising the money,” he said. “NamPower is very good at raising financing through bonds.” The state-owned utility has previously obtained financing from KfW and the French Development Agency, he said.
Yields on NamPower’s US$49 million of bonds due July 2020 have risen 117 basis points, or 1,17 percentage point, this year to 8,48 percent as of November 25. Average rates on African dollar-denominated sovereign debt have risen 144 basis points, according to JPMorgan Chase & Co. Indexes, as the Federal Reserve considers an end to stimulus that has boosted demand for emerging-market assets.
A net electricity importer, Namibia is negotiating to bring in 100 megawatts from Zambia in addition to the 50 megawatts it already receives, 100 megawatts from Mozambique and 50 megawatts from Zimbabwe.
NamPower, based in the capital Windhoek, plans to spend 7 billion Namibian dollars to extend its grid network over the next five years, Shilamba said. “Some of the transmission expansion projects are already being implemented,” he said. — Bloomberg.
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