Namibian national power utility to raise R3bn for network expansion

Rand Merchant Bank and pointBreak (Namibia) supported by NedCapital (Namibia) play a key role in arranging the bond issue and placing it with local investors

NamPower, Namibias national power utility, is to raise R3bn in order to fund the expansion of its transmission network interconnecting to neighbouring Zambia.

The Caprivi Link Interconnector will establish a link between the Namibian, Zambian and South African electricity networks. This ambitious R3-billion project, which is expected to be completed in 2009, will provide Namibia with an alternative source of foreign energy and lessen its current dependence on South Africa.

At least 50% of the R3bn will be raised in the South African and Namibian capital markets, and placed with investors in those countries. This rand-denominated, long-term debt issue will be dual-listed on the Nambian Stock Exchange and the Bond Exchange of South Africa (BESA).

"What makes the transaction noteworthy, besides its size, is the fact that it will be dual-listed in both Namibia and South Africa," says Baronice Hans, General Manager: Finance, Treasury and Property Management of NamPower. "This clearly points to greater integration of southern Africa's capital markets. It is also the first cross-border, debt-raising transaction of this kind done in the southern African capital markets."

Says Marilize Lansdell, General Manager: Market Development BESA: "BESA fully supports the development and growth of African capital markets, in line with SADC and NEPAD initiatives.  We are able to offer our expertise, experience and existing market infrastructure to the benefit of other markets. This historic Namibian dual-listing is a stepping stone towards opening our regional African debt capital market to a wider pool of issuers and investors.  Through on-going co-operation between exchanges, both liquidity and investment opportunities in the African region will be enhanced."

pointBreak and NedCapital, both Namibian companies, together with Rand Merchant Bank (RMB) are responsible for arranging and placing the debt issue.

RMB, pointBreak and NedCapital, which all trade Namibian debt and offer a full suite of treasury services in Namibia, were selected after a tender process involving 26 international banks.