By 
Stanbic Bank Head of Investment Banking, Mwila Pascal Mwenya, has emphasized the need for a collaborative and well-planned approach to project finance, particularly for large-scale energy projects in the country.
Mwenya also noted the need for project developers to engage financiers like Stanbic Bank Zambia early and exploring innovative financing options, in order to increase their chances of success.
Speaking at the just ended panel discussion at the Energy for Africa Conference held in Lusaka at Mulungushi International Conference Centre under the theme: “Investment Opportunities in the Energy Sector in Zambia and Africa,” Mr Mwenya said this increases the chances of a project being feasible and avoid costly rework.
Mr Mwenya was contributing to a panel discussion on exploring actions to address transmission constraints, innovative financing approaches, project guarantees, regional pricing models, and the bankability of PPAs with government utilities.
He stated that Stanbic had been using options such as syndicated facilities, project bonds, and partnerships with other banks to manage risk and secure funding like the case of Copperbelt Energy Corporation Renewables and Chisamba Solar Power Plant.
“Project financing has to be pushed out a little further because during the project you will find out that you cannot stop at five or seven years for a project which a long payback period,” Mwenya said.
He emphasised the need to working closely with power producers, technical advisers, and financial experts to create viable projects and avoid failing along the project implementation process.
Mwenya highlighted the need for innovative financing solutions and potentially greater involvement from international institutions or other partners to support large-scale projects in Zambia.
He also noted that projects were getting bigger, and that financing them was becoming more complex. He added that traditional finance models often had shorter tenors which may not match the project’s lifespan and to address this, the bank had used options like export credit agencies and Development Finance Institutions (DFIs) to extend the tenor.
Contributing to the discussion, Mr Kamukwamba Kumwenda, Managing Director of the Electricity Supply Corporation of Malawi (ESCOM) highlighted several challenges such as lack of infrastructure with many areas remain unconnected.
“This situation in Malawi is making it difficult for Independent Power Producers (IPPs) to develop projects in these regions and limiting the growth of IPPs in the sector,” Kumwenda said.
He noted that there was a high technical and commercial loss of about 20 percent annually of Malawi’s generation capacity, and that this impacted the financial sustainability of energy projects.
Kumwenda stated that the challenges underscored the need for innovative solutions and strategic planning to address the unique difficulties of energy development in remote areas.
Similarly, National Pensions Scheme Authority (NAPSA) echoed Kumwenda’s sentiments on the need for innovative solutions and strategic planning to address the unique difficulties of energy development in remote areas.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments