File:ZESCO Limited officials inspect the Kariba North Bank Power Station extension programme, which is expected to increase the power generation capacity for Zambia

The Zambian government and ZESCO are planning a $500 million bond program in part to settle arrears to independent electricity providers, according to one of the companies owed.

The bond program will be done in two tranches, the first of which could be in the next two months, said G.R.K. Prasad, director at Nava Bharat Ventures Ltd., the Indian company that operates a coal-fired power plant in Zambia.

ZESCO owes Nava Bharat $169 million, he said Friday on a call with investors.ZESCO Spokeswoman Hazel Zulu didn’t respond to an email and a call seeking comment.

Zambia’s external debt has about almost doubled from $4.8 billion in 2014 to $9.5 billion in September, as the government built hundreds of kilometers of roads, power stations and airports.

Neither did Energy Minister Matthew Nkhuwa when contacted outside normal business hours, nor finance ministry spokesman Chileshe Kandeta.

“We are told that it’s in very advanced stage by the government and the local utility,”Prasad said of the bond program.

Zambia’s external debt has about almost doubled from $4.8 billion in 2014 to $9.5 billion in September, as the government built hundreds of kilometers of roads, power stations and airports.

The country is now at high risk of external debt distress, according to the International Monetary Fund.Yields on its Eurobonds are above 13 percent, indicating a new bond program would be pricey.Nava Bharat owns 65 percent of the 300 megawatt Maamba power plant in southern Zambia.

Bloomberg

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17 COMMENTS

  1. I thought this reckless borrowing was left 2018.

    Exactly when did ZESCO take out this loan from India?

    Is this another loan that Lungu signed for?

    It also appears that Lungu did indeed borrow the 500 million USD as reported by some media agencies, even though only 300 USD million was meant to be borrowed when parliament had been dissolved.

    It would be prudent for this government to state how all this money was spent.

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    • I really dont understand this maths by the PF. So borrowing for ZESCO was meant to be the kind of sensible borrowing …. that is … for production. So how can you fail to pay the intial loan if projections were properly done and assuming contracts were not over inflated or worse still some finances from this borrowing were not diverted to other non productive means ? now we are borrowing to pay for another loan?? No wonder this Minister of finance was referring to the low grade jobs in Dubai as creating employment … you can never create employment in which you are not generating any economic activities to support those jobs. This ZeSCO thing stinks of ESKOM and ZUMAnomics way of handling things

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    • Zesco is bankrupt, Let’s start admitting it.
      wwwDOTzambianobserverDOMcom/zesco-in-load-shed-by-mozambique-over-us70-million-debt/

      PF Govt is forcing Zesco to import expensive Gen-Set electricity from Mozambique company to avoid load-shedding. They then sell it to Zambian consumers at a loss, leaving a huge hole in Zesco’s cash-flow.
      Also years of over-employing PF cadres into Zesco ranks has taken its toll.
      Even JK’s was rewarded by PF00Lish Govt by giving his wife a high ranking job at Zesco.

      The way ZCCM crumbled is the way Zesco has been mismanaged. Anytime Chinese will take over.

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  2. No amount of hallucination will stop us from getting incite into what this PF’s appetite for borrowing is to perpetuate their corruption, grand larceny, theft and mismanagement. Another US500million, in the loop for these misfits to share. We need to open our eyes before its too late, other wise we will all be sold into slavery in the middle east by these minions.

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  3. I hope there is enough pressure from the public not to allow this reckless borrowing….But also, I don’t believe Zesco’s balance sheet can accommodate this borrowing?? What about the Chinese, don’t they have a stake in Zesco, with all the loans already give to Zambia, won’t they have a say in this?
    It will be interesting to hear the official position(govt) from the people authorized to speak on this purported transaction

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  4. Here comes another PF and lungu “special purpose vehicle”

    These special purpose vehicles facilitate stealing and waiste of GRZ money by lungu and his gang, now even his seemingly subsistant wife has joined in the looting on the backs of poor Zambians….

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  5. Zesco is a monopoly and I wonder why it cant make profits.What has happened to the govt policy of corporatization and/or commercialisation of State Owned Enterprises to improve corporate governance and efficiency?

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  6. Whatever happened to the so called removal of Zesco subsidy that saw the 75% consumer tariff increment on energy in 2017. What was the idea of that? You mean all that money has also disappeared into thin air? And why Zesco? Why not education? Why not agriculture? SA are unbundling Eskom. We are still fumbling in the dark over a parastatal that is clearly inefficiently run? Whats the interest in this bond?

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  7. Yaba, another flood of depressing news! So wastage did not stop with one thoughtless Michael Sata once he opened the flood gates, starting with RDA road contracts under Willie Nsanda in state house? To my surprise he is actually the hero and demigod of PF!

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  8. No need to borrow that money to repay the so-called ZESCO Loan. We’ve for a long time been complaining that the PF stealing government has been using ZESCO as a conduit to steal public money meant for every Zambian LET EDGAR LUNGU AND VICTOR MUNDENDE PAY THAT DEBT. THEY ARE BOTH STINKING RICH BECAUSE OF STEALING OUR MONEY EVERY DAY. Many more ZESCO Employees are over rich in Zambia because of stealing this same money thing. We don’t want another loan or Euro bond. Let ZESCO employees and Edgar Lungy pay the debt. They have more than enough money to pay.

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