LAHORE: The Water and Power Development Authority (Wapda) is likely to delay issuance of its second $ 500 million green Eurobond for the time being in connection with the construction of Diamer-Basha Dam, said sources close to the authority.
Earlier, the Wapda was expecting to issue it by the middle of last year. However, it could not be materialised in 2022 and the Authority has once again put it on the backburner for the time being keeping in mind the dwindling bond market internationally coupled with fast flattening financial health of the country.
“How Wapda can go for the issuance of second Eurobond in a situation when the country’s credit rating is in doldrums,” said sources close to the Authority.
When contacted, former chairman Wapda Lt Gen Muzammil Hussain (retd) termed the situation as “sad”.
He was behind the idea of raising funds from the international market for the dam due to the financial stability of Wapda and a strong feasibility of the two eco-friendly projects.
Wapda may delay issuance of second Eurobond till year-end
The 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. Some 201 investors had offered investments worth $ 3 billion to Wapda due to a stable rating issued by three credit rating agencies of world repute. The offer was six times higher than what Wapda had sought through first-ever bond for the construction of Diamer-Basha Dam.
However, the situation has taken a U-turn since then and the imminent threats of the country’s default in debt repayment has changed the scenario altogether. The sources said Wapda was even facing difficulties in paying international firms in foreign exchange against the earlier $ 500 million green Eurobond after the embargo on foreign exchange transactions introduced by the SBP.
They said availability of financial resources is becoming difficult with every passing, as the central government has failed to release funds allocated under the head of the Public Sector Development Programme (PSDP) and Central Power Provider Agreement (CPPA).
They have apprehended further delay in the release of funds for both Diamer-Basha and Mohmand Dams due to the financial constraints of the federal government.
Copyright Business Recorder, 2023