LAHORE: The Water and Power Development Authority (Wapda) is likely to delay issuance of the second $500 million green Eurobond until the end of 2022, said sources close to Chairman Wapda Muzammil Hussain.
Earlier, Chairman Wapda was expecting its issuance within six months to one year when Business Recorder had interviewed him on the issue back in November 2021.
According to the sources, the Wapda was quite comfortable with the foreign currency component of funds arranged for the Diamir Basha dam at present and there was no immediate need for the second issuance.
“Wapda will go for the next issuance when it needed it. Perhaps by the end of 22,” they informed this scribe when pointed out that there are rumours in the market that Wapda was facing a problem in generating funds for the dam.
It may be noted that Wapda had launched its first green Eurobond in May 2021 to raise $500 million at a competitive price of about 7.5 percent interest rate for 10 years.
WAPDA to officially launch Pakistan's first Green Euro bond today
Some 201 investors had expressed their interest to invest in the bond due to a stable rating issued by three credit rating agencies of world repute. They had offered Wapda investments worth $3 billion - six times more than its need.
They said Wapda needs nearly $2.2 billion over five years ($1.1 billion in the first two years), out of which Wapda has initially raised $500m through the Indus bond. The number of bonds will be gradually increased based on the financial needs of the projects to be funded.
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 shown keen interest in Wapda projects, the sources close to the Chairman of Authority said.
They said the phenomenon of cost escalation was typical to hydropower projects the 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.”
Copyright Business Recorder, 2022