Namibia power utility NamPower on Wednesday dually listed on the Namibia Stock Exchange (NSX) and the Bond Exchange of South Africa (BESA) to raise US$430 million to fund its major power generating projects.
About half of the US$430 million would be raised in the South African and Namibian capital markets.
“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 the southern African capital markets,” said Baronice Hans, finance manager of NamPower.
BESA said that the historic Namibian dual listing is a stepping stone towards opening the bond exchange to regional African debt capital markets to a wider pool of issuers and investors.
“Through ongoing co-operation between exchanges, both liquidity and investment opportunities in the African region will be enhanced,” explained Marilize Landsdell, market development manager of BESA.
NamPower managing director Paulinus Shilamba said at the listing in Namibia that funds raised would be used to fund the Caprivi Link Interconnector, a 970km, 350 kV High Voltage Direct Current (HVDC) bipolar link which is expected to link Namibia’s electricity networks to that of Zambia and Zimbabwe.
The line is a stop gap measure to avert looming electricity blackouts in Namibia, a net power importer.
Most SADC member countries would have eroded the energy safety margin by end of 2007, resulting in reduced ability to meet peak demand.
The Caprivi Interconnector runs from Zambezi substation near Katima Mulilo in the eastern border with Zambia to inland substations.
Shilamba said that the Caprivi Link would help Namibia diversify supply options, reduce Namibia’s traditional reliance on imports from South Africa and position the power utility to optimise energy trading amongst SADC member countries.
The link would also help relieve congestion experienced during peak periods on the interconnection between Zimbabwe, Botswana and South Africa, as it will provide an alternative to wheel power from DRC and Zambia to South Africa.
Scrambling to avoid a total electricity blackout amid biting power shortages in most SADC countries, Shilamba said that NamPower is negotiating a power purchase agreement with Zambia to import 100 MW.
Namibia also wants an agreement with Zambia for an option of an additional 100 MW through a wheeling path, irrespective of the ultimate source of power.