In a move that speaks to its commitment to financing power and infrastructure development on the continent, Standard Bank has finalised a USD120 million debt package with Zimbabwe Power Company (ZPC). This will facilitate the rehabilitation of the Kariba South Hydro and Hwange Thermal power stations, increasing capacity and improving efficiency.
As Lead Arranger for the facility, Standard Bank partnered with The Eastern and Southern African Trade and Development Bank (PTA Bank) to deliver the financing. The transaction was a continuation of a previous funding arrangement with ZPC, which went towards their contribution into the 300MW expansion at Kariba South Hydro Power Station.
Access to energy remains crucial to sub-Saharan Africa’s future growth, yet power supply remains extremely limited across this region, constraining economic growth and development. According to Tandiwe Njobe, Regional Head: Investment Banking at Standard Bank, this landmark transaction – in which the bank leveraged its sector and technical expertise, as well as its strong relationships with key stakeholders in the region – will improve access to power for Zimbabwe and Namibia. In the medium to long term, benefits of improved power supply and reliability will extend to other Southern African Power Pool (SAPP) members.
The finance facility is cross border, placing reliance for repayment on a long-term Power Purchase Agreement (PPA) between ZPC and NamPower. ZPC has a long track record of delivering power to NamPower. The PPA provides a long-term and sustainable cash flow stream to ZPC, enabling the entity to raise further funding for new projects and now for the rehabilitation of existing infrastructure.
Standard Bank has a long-standing relationship with ZPC as their primary banker, and with NamPower, which ultimately benefited all parties in the transaction. “It was important for us to support the regional power sector through this loan facility,” says Ms Njobe. “The facility is significant in its contribution to increasing power generation in a region which has an on-going deficit and a clear need for dependable and sustainable power supply.”