Standard Chartered and the United States Agency for International Development (USAid) have partnered on a US$60mn term loan for Zambia’s Electricity Supply Corporation (Zesco).
The loan will finance capital expenditure for Zesco’s Lusaka Transmission and Distribution Rehabilitation Project (LTDRP) as well as provide bridge financing to facilitate new connections to the grid.
The facility is one of the largest that USAid has delivered within President Obama’s ‘Power Africa’ partnership since the campaign’s launch in 2013. For this Zesco/USAid partnership, Standard Chartered acted as the global co-ordinator, structuring bank, bookrunner, mandated lead arranger, facility agent and account bank.
This facility is Standard Chartered Zambia’s longest tenor and largest facility provided to a Zambian parastatal entity to date. Andrew Okai, CEO of Standard Chartered Zambia, comments on the transaction: “This is the bank’s second Power Africa partnership to benefit Zambia, with the first being Standard Chartered’s private equity investment in Zambian Energy Corporation.”
In 2014 the bank more than doubled its commitment to the Power Africa initiative, increasing its pledge from US$2bn to US$5bn.
“Part of Zesco’s strategic plan is to improve the quality of electricity and enhance connections to the national grid,” says Zesco’s managing director, Victor Mundende. “USAid and Standard Chartered’s support has already delivered more than 15,000 new power connections. Furthermore, some of the funds provided will be used for other scheduled power system upgrades, contributing to new and existing connections to homes and businesses across the country. Zesco remains committed to meeting its aspirations of [providing electricity to] 60% of Zambia by 2030.”