Stanbic’s US$165m funding helps ZESCO connect more districts to the grid

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A US$165 million finance package from Stanbic Bank has helped ZESCO connect more districts in North-Western and Western provinces to the national electricity grid.

The partnership culminated this week with the switching on of the final phase of the North-Western Grid Extension Project, adding Mufumbwe, Kabompo, Manyinga, Mumbezhi, Zambezi, Chavuma and Lukulu to the circuit.

“This transaction demonstrates our ability as a Bank to operate across product, sector and geography to deliver innovative debt solutions to our clients. This way, we are able to remain relevant as a provider of long term debt capital for the financing of energy infrastructure in our chosen markets,” said Stanbic Bank Acting Chief Executive Jaulani Mtine during the official switching ceremony attended by Vice President Inonge Wina, Minister of Energy David Mabumba, Western Province Minister Nathaniel Mubukwanu and ZESCO Managing Director Victor Mundende.

“Stanbic Bank values its longstanding partnership with ZESCO, the power engine of our economy and hails the power utility for granting the Bank the opportunity to partner with them in this ground-breaking project that will not only be key to the mining sector, but will also allow tens of thousands of Zambians to enjoy the benefits of electrical power in areas previously not blessed with this utility,” he added.

This year, the economy is expected to grow at an estimate of 7.3% owing to growth in Government expenditure, significant foreign investment and a rise in private sector spending, said the bank.

The importance of the energy sector as a driver of our economy cannot be overemphasized and is the reason why we are celebrating this landmark transaction between Government, ZESCO and Stanbic Bank Zambia which is a member of Standard Bank Group, said Mtine.

The overall funding facility of US$165 million provided to ZESCO consists of two sub-tranches: a commercial tranche of US$30 million provided by Standard Bank, and an Export Credit Agency supported tranche of US$135 million jointly underwritten by Standard Bank and Nordea Bank as joint mandated lead arrangers. The funding is for 14 years and will be provided by the Swedish Export Credit Agency.

Amongst other drivers of the economy, mining is expected to help drive GDP increase in Zambia. The connecting of Western and North-Western to the national grid was expected to stimulate economic activities, grow communities and bring development.

Last year Stanbic Bank partnered with Zesco on infrastructure projects on a massive scale that included the North-Western Power project.

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