Zambia Plans $500 Million Bond to Pay Power Bills, Supplier Says
(Bloomberg) -- Zambia and its state-owned power company are planning a $500 million bond program in part to settle arrears to independent electricity providers, according to one of the companies owed.
The bond program will be done in two tranches, the first of which could be in the next two months, said G.R.K. Prasad, director at Nava Bharat Ventures Ltd., the Indian company that operates a coal-fired power plant in Zambia. Zesco Ltd., the state-owned electricity supplier that the plant supplies, owes Nava Bharat $169 million, he said Friday on a call with investors.
Zesco spokeswoman Hazel Zulu didn’t respond to an email and a call seeking comment. Neither did Energy Minister Matthew Nkhuwa when contacted outside normal business hours, nor finance ministry spokesman Chileshe Kandeta.
“We are told that it’s in very advanced stage by the government and the local utility,” Prasad said of the bond program.
Zambia’s external debt has about almost doubled from $4.8 billion in 2014 to $9.5 billion in September, as the government built hundreds of kilometers of roads, power stations and airports. The country is now at high risk of external debt distress, according to the International Monetary Fund. Yields on its Eurobonds are above 13 percent, indicating a new bond program would be pricey.
Nava Bharat owns 65 percent of the 300 megawatt Maamba power plant in southern Zambia. Africa’s second-biggest copper producer relies on hydropower for almost all of the rest of its supplies.
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