Zim bank to issue $65m bonds for electricity

Harare - A state-owned Zimbabwean bank will float two bonds worth $65m on Tuesday to boost electricity output and increase use of pre-paid meters, a senior bank official said.

The southern African country produces up to 1 300 MW of power against peak demand of 2 200 MW. Although it imports electricity from neighbours, this is not enough to end severe power cuts that have hit businesses and households.

Tonderai Nhika, head of projects at the Infrastructure and Development Bank of Zimbabwe (IDBZ), told reporters the bank would issue a $15m bond and a $50m with coupons of 8% over five years to purchase pre-paid meters.

The money will be used to upgrade a small power plant in Harare and contribute towards expanding the 750 MW Kariba hydro power station.

Zimbabwe contracted China's Sino Hydro to add 300 MW at Kariba, with China Eximbank covering 90% of the cost.

After the upgrade, output at Harare's power plant would rise to 65 MW from the current 25 MW, Nhaka said.

"Both transactions will lead to an increase in power generation that will lead to a reduction in the import bill of about $388m per annum," Nhaka said.