Finance Minister Alexander Chikwanda has revealed that part of the UDS 750 million raised from Zambia’s debut 10 year Eurobond will be used to recapitalize Zambia Railways.
And Zambia’s inaugural bond was yesterday oversubscribed by 24 times with foreign investors willing to lend the country up to USD 12 billion as appetite for Sub Saharan debt instrument grows.
Mr. Chikwanda told a media briefing in Lusaka this morning that USD 120 million from the bond will go towards revamping the operations of the railway company.
He also revealed that a further USD 186 million from the bond will be used to pay for Zambia’s equity stake in the development of the Kafue Lower Power Station.
Mr. Chikwanda stated that the Nitrogen Chemicals will also benefit through capital injection from the money raised in yesterday’s bond issue.
He assured that government will prudently utilize the funds on infrastructural projects as outlined in the Sixth National Development Plan.
The Finance Minister has also promised to publish a list of projects that the funds will be used for and the schedule of disbursement to ensure transparency and accountability.
Mr. Chikwanda also reassured that the country’s foreign debt stock still remains sustainable even after the USD 750 million bond issue.
Meanwhile, Mr. Chikwanda has revealed that Zambia had to take up USD 750 million than the intended USD 500 million, the largest order book for Sub Saharan Africa this year but at 5.375% also the lowest coupon.
He explained that the successful first sovereign bond represents Zambia’s high rating by the international community.
The Finance Minister also cautioned some political groupings from politicizing the successful bond issuance saying credit should go to all Zambians.
Mr. Chikwanda said no politician should take credit for the success because development in Zambia will only happen if there is collective responsibility by all Zambians.