Govt courts World Bank for Morupule loan

Staff Writer | Wednesday April 7, 2010 00:00

 

'The proposed World Bank loan will finance the purchase and installation of three main transformers, transmission line from Morupule B to Phokoje and water pipeline from new Paje/Mmashoro wellfield to the project site,' Minister of Finance and Development Planning, Kenneth Mathambo, said yesterday.

He said that the Botswana Power Cooperation has already secured a loan for P5.6 billion from consortium consisting of Standard Bank and the Industrial and Commercial Bank of China (ICBC) to finance part of the cost of the project 'The loan is guaranteed by the government of Botswana and the World Bank has provided a Partial Credit Guarantee,' Mathambo said.

He stated that the project is estimated to cost P11.6 billion and consists of power station, distribution lines, substations and water pipeline.

'The funding structure is 50 percent debt and 50 percent equity basis, with government injecting 50 percent as equity into the project and the Botswana Power Cooperation, with the assistance of my ministry, sourcing the debt portion.  Already, the sum of P1.5 billion was availed by the Government to the BPC in September 2008 as upfront payment to the contractor, and this forms part of the equity,' Mathambo told Parliament.

The loan will be repaid in 30 years, with a grace period of four years. The interest rate is 40 basis points.