NamPower to raise N$2.5b on bond market
NamPower Managing Director Paulinus Shilamba has revealed that the power utility will go on the bond market to raised N$2.5b which is part of the N$18b required for capital projects in the next four years.
Shilamba also told The Villager that his company will before the end of this year float a bond on the local market. The money is needed to go to the multibillion dollar Kudu Gas Project to kick in in 2018.
He also added that while about half of the N$18b is to be sourced from NamPower’s own cash reserves and operational revenue about N$5.5b will be finance through loans.
“There is a lot of money floating in the local market and to be able to reach it, it has to be done through the registration of a bond, which is what we are going to do. Primary to that, we will engage a campaign nationwide to talk to stakeholders and explain the need of that money for the development of the projects towards electricity power generation,” he said.
Shilamba revealed that they are also keen to approach various International banking institutions such as European Investment Bank.
Recently, Nampower was rated by Fitch as stable on the outlook on the long term ratings with the long term foreign currency Issuer Default Rating (IDR) at ‘BBB-‘ and Short –Term IDR at ‘F3’. Fitch has also affirmed NamPower’s National Long term rating at ‘AA- and its Short term rating at ‘F1+’.
The reason behind NamPower’s rating is that his company has strong legal, operational and strategic links with the State of Namibia, including direct government guarantees for part of NamPower’s debt.
He added that money raised from the bonds and borrowing would also back up a 30% stake of NamPower on the 250MW long term power generation facility, to be built in Walvis Bay, in the Erongo Region.
The construction of power plant to cost N$3b is expected to start in the first quarter of 2015.
Although most of the companies which have shown interest in the floated EOI by NamPower in April are of foreign origin, Shilamba noted that it is unfortunate but that the type of development to be undertaken is very complex, and needs technical capacity.
“ We do not have the required capacity locally towards such complex projects, however, we advise the foreign companies to team up and form Joint Ventures with local companies to also build up their capacities and experience,” he said.
He added that currently, the board is busy assessing the companies that have shown interest and only about five to ten companies will be called in to receive tender documents and be able to go to the second level of bidding for the project.
Shilamba also noted that the country is in a position to overcome the looming power deficit.
“I am very confident we will beat those challenges; what we need at this point is the support of stakeholders in carrying ahead those projects,” he said.
He also underscored the importance of the Ruacana Power station which in rainy season (December-June) is able to generate about 340 MW. In that period, it is operational on full capacity and 24 hours a day contributing 40% of the country’s total requirement of 500MW.
In the dry season, Ruacana plant only runs 16- 18hours per day due to the low incoming of rain during July to November.
Ruacana Power station recently received its new runner to the cost of about N$750m enabling it to perform at full capacity.