ICBC contributes $91.25 million to $590 million syndicated loan for Phase I of 450MW (3x150MW) Maamba Coal Power Plant Project (Linked to Record ID#56854)

Project narrative

On July 28, 2015, a consortium of banks including Bank of China and Industrial and Commercial Bank of China (ICBC) signed a $590 million syndicated loan agreement with Maamba Collieries Limited (MCL) -- a special purpose vehicle and joint venture between Nava Bharat Ventures Singapore (65% equity stake) and Zambia Consolidated Investments (35% equity stake) -- for Phase I of 450MW (3x150MW) Maamba Coal Power Plant Project. According to the World Bank, ICBC contributed $91.25 million and Bank of China contributed $91.25 million (see Record ID#56954) to the first tranche which provided a $365 million buyer’s credit loan entirely insured by China Export & Credit Insurance Corporation (Sinosure). According to an annual report from Nava Bharat Ventures (source ID 115393 p. 68), the borrowing terms are as follows: 10-year maturity and 5.462% interest rate (LIBOR plus 500 basis points). The first payment was made in March 2017, and as of March 31, 2018, MCL had paid back three installments. The syndicated loan consists of five separate tranches: (1) $365 million tranche involving Bank of China, ICBC, and Standard Chartered that carries a 10-year maturity and an interest rate of LIBOR plus 500 basis points, (2) $50 million tranche involving Industrial Development Corporation of South Africa that carries a 10-year maturity and an interest rate of LIBOR plus 660 basis points, (3) $100 million tranche involving Development Bank of Southern Africa that carries a 10-year maturity and an interest rate of LIBOR plus 660 basis points, (4) $55 million tranche involving Africa Finance Corporation that carries a 10-year maturity and an interest rate of LIBOR plus 757 basis points, and (5) $20 million USD tranche involving Barclays Bank Zambia Plc that carries a 10-year maturity and an interest rate of LIBOR plus 500 basis points. Maamba Collieries Limited (MCL) is responsible for the design, financing, and implementation of the 450MW (3x150MW) Maamba Coal Power Plant Project on a public-private partnership (PPP) basis. While some sources indicate that the project is being financed according to a debt-equity ratio of 70:30, others report that the ratio is 62:38. MCL also signed a power purchase agreement (PPA) to supply 100% of the plant capacity to ZESCO Limited, Zambia’s state-owned power company, for 20 years. MCL, in turn, signed an engineering, procurement and construction (EPC) contract with Shandong Electric Power Construction Corp. (SEPCO). A formal groundbreaking ceremony for this project took place on July 8, 2011. However, construction itself did not begin until May 17, 2012. The project was ultimately completed on December 1, 2016. Nava Bharat Ventures Singapore has now assumed responsibility for the operation and maintenance of the 450MW power plant. This project is expected to eventually enter a phase II expansion. A second coal power station with 340 MW capacity is planned in the Sinazongwe district by the company EMCO Energy. If phase II is successfully competed, Zambia’s installed coal capacity may increase by over 190%.