NAPSA HAS SEALED A $400 MILLION DEAL WITH MAAMBA COLLIERIES LTD

By Daily News Reporter

National Pension Scheme Authority (NAPSA) has sealed a US$400 million deal with Maamba Collieries Limited (MCL) to build a new 300MW coal power plant.

Speaking to the media in Lusaka NAPSA Director General Muyangwa Muyangwa said that the investment in the project is a sign of the authority’s confidence in Zambia's future as it realised that power generation affects employment which trickled down to the NAPSA contributions.

“So this is the boost to the power generation and will help increasing manufacturing,create jobs and investment in order to maintain cashflow into the pension scheme.

For this project Maamba Phase II will be financed through a combination of debt (US$ 300 million) and equity (USD 100 million).

Meanwhile NAPSA Board of Trustees chairperson Shipango Mutate said also added that the authority is providing US$ 200 million as debt financing (loan), the remaining US$ 100 million would come from local equity investors.

The loan term is for ten and a half years and there is a moratorium period of two and a half years on principal repayments.

This means NAPSA will only receive interest payments during this initial period, with principal repayments starting after two and a half years.

This debt investment is priced at nine percent net of taxes, meaning they will receive a nine percent return on their investment after accounting for any taxes.

Maamba Phase II is a bold move to tackle the crippling power deficit caused by a severe drought that's choked the country's hydropower plants.

The drought has slashed hydropower generation, leaving the country with a massive 750MW power shortfall resulting in business frustrations for many and more than 12 hours of load shedding for all.

And this is expected to generate around 1,200 jobs during construction and 400 permanent positions once operational.

And that the authority is projected to earn up to, "US$107.6 million in interest income from the project, with US$ 33.7 million interest projected to be received during moratorium period," disclosed Muteto

The project is a crucial step towards diversifying Zambia's energy mix as the country relies heavily on hydropower, leaving it vulnerable to the whims of weather.

Muyangwa said this project was not the first investment in the energy sector as the authority had previously invested in the Kafue Gorge financing a loan of over US$950 million.