LAHORE: The Water and Power Development Authority (Wapda) will launch its second $500 million green Eurobond, called “Indus bond”, in six months to one year, said Chairman Wapda Muzammil Hussain.
While talking to Business Recorder, he said the Authority had started working in that regard. Earlier, he said, the Wapda had launched its first green Eurobond in May last to raise $500 million at a competitive price of about 7.5 percent interest rate and 201 investors had turned up to invest in our bond due to a stable rating issued by three credit rating agencies of world repute.
According to him, 10 hydropower projects are under construction at present while five more are ready for construction and feasibility studies of another 10 projects have been completed. Dozens of other projects were at the planning stage, he added.
Pakistan's WAPDA raises $500m in country's first green bond issuance
He said representatives from a French firm AFD and a German firm KFW were in WAPDA House nowadays to discuss financing of Keyal Khwar Project.
When asked about the financial impact of dollar and cost escalation on the construction of Diamir Basha, Dasu and Mohmand dams, he said it was limited to the domestic component of loans, and not the foreign one.
He said: “The value of the US dollar was Rs148 when we launched these projects, which has reached Rs170 now. However, this 15 percent appreciation has impacted us on loans obtained in local currency from domestic banks,” he said, and added that all the financial models for the construction of dams were embedded in tariff.
“The construction of both Dasu and Mohmand dams would be completed by 2025-26 to generate 12 billion and four billion units of electricity, respectively. It would bring billions of rupees revenue to Wapda to meet not only the escalating financial needs for Diamir Basha but also be helpful in starting Skardu and Kala Bagh dams, subject to a political consensus.” Foreign investors have keen interest in WAPDA projects, he said.
Wapda executing ambitious hydropower-generation expansion plan: chairman
He said the phenomenon of cost escalation was typical to hydropower projects world over, which had already been factored in by the organization. “Some 80 percent hydro projects are time overrun that ends up on cost overrun,” he stressed.
The WAPDA Chairman said such projects could also be carried out those projects on EPC (Engineering, Procurement, and Construction) basis but the EPC was meant for smaller projects.
Copyright Business Recorder, 2021
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