Nampower Launches N$3-Bn Bond Issue


By Staff Reporter


Nampower last week officially launched a N$3-billion bond issue that will be dual-listed on both the Namibian and South Africa Stock Exchanges.

The company will dual-list the Namibian dollar-denominated long-term debt issue on both the Namibian Stock Exchange and the Bond Exchange of South Africa (BESA).

In a statement, Nampower said it placed the N$3-billion bond issue to fund the expansion of the electricity transmission network connecting Namibia to neighbouring Zambia.

The Caprivi Link Interconnector will create a link between the Namibian, Zambian and South African electricity networks.

Nampower said the ambitious N$3-billion project – that it expects to complete in 2009 – would provide Namibia with an alternative source of foreign energy and lessen its current dependence on South Africa.

Nampower Managing Director, Paulinus Shilamba, said the first stage of the projects comprised a roughly 970 km 350 kV HVDC bipolar transmission line with mono-polar converter stations and associated AC sub-stations.

Nampower completed the first part of the line, a 220 kV line from Victoria Falls to Katima Mulilo in September 2006.

The DC line will begin at Katima Mulilo and end at Otjiwarongo, with construction starting July 2007 and ending somewhere in mid-2009.

“The Caprivi Link will relieve congestion experienced during peak periods on the inter-connection between Zimbabwe, Botswana and South Africa by providing an alternative path to wheel power from the DRC and Zambia to South Africa.

“This is in line with the Southern African Power Pool (SAPP) objective to interconnect all the SADC countries,” he said.

Nampower, he added, was currently negotiating a power purchase agreement with the Zambia Electricity Supply Corporation (ZESCO) consisting of the right to a firm capacity of 100 MW.

This includes a further option for an additional 100 MW through a wheeling path, irrespective of the ultimate source of power.

Shilamba said the parties have already agreed on prices, which are competitive with any feasible alternative.

The company said it would raise at least 50% of the N$3-billion on the South African and Namibian capital markets, while it would place the rest privately with investors in the two countries.

Baronice Hans, General Manager of Finance, Treasury and Property Management at Nampower, said there were several unique aspects to the bond issue.

“What makes the transaction noteworthy, besides its size, is the fact that it will be dually listed in both Namibia and South Africa.

“This clearly points to greater integration of Southern African capital markets. It is also the first cross-border, debt-raising transaction of this kind done in Southern African capital markets,” he said.

According to the statement, Rand Merchant Bank and pointBreak (Namibia) supported by NedCapital (Namibia) played a key role in arranging the bond issue and placing it with local investors.

RMB, pointBreak and NedCapital, which all trade Namibian debt and offer a full suite of treasury services in Namibia, were selected after a tender process involving 26 international banks.


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