Standard, ICBC fund Botswana project
13 May 2009
Africa's biggest bank by assets, Standard Bank, and the Industrial and Commercial Bank of China (ICBC) will finance the expansion of the Morupule B Power Station in Botswana.
In a statement on Tuesday, the banks said they had been mandated as joint lead arrangers to provide US$825-million to finance the expansion of the power station near Palapye in eastern Botswana.
"This is the first major transaction involving Standard Bank and ICBC, which has a 20% stake in Standard Bank," the banks said.
The $1.6-billion coal-fired Morupule B Power Station project is a major Botswana government initiative, driven by the Botswana Power Corporation, aimed at boosting the country's power generation capacity.
"It comes in the wake of Eskom switching off its power to Botswana to supply growing domestic demand in South Africa."
As part of the contract, the China National Electric Equipment Corporation (CNEEC), one of ICBC's top corporate clients, has been awarded a $970-million contract to supply and build a significant portion of the power station.
"This deal comes at a time when banks around the world are cutting back on international lending and concentrating on domestic lending in the wake of the global financial crisis and government bail-outs," the banks said.
"This project will make a major difference to the lives of millions of people in Botswana and we are proud to be part of it. There is little doubt that had it not been for our strategic partnership with ICBC, we would not have been able to undertake the funding of a project of this scale," said Jacko Maree, Standard Bank Group chief executive.
He added that his group's partnership with ICBC had opened "a unique financial services gateway" between Africa and China.
"This project will hopefully the first of many that are in the pipeline," Maree said.
The Morupule B Power Station project involves the installation of four 150 megawatt coal-fired air-cooled units.
Associated projects include water supply works and the construction of transmission lines and substations for the distribution of power to the rest of Botswana's grid.
Sapa
