Zambia Electricity Supply Corporation Limited (ZESCO) is using letters of credit (L/Cs) to support financing to implement capital projects.

The state-owned power company will also continue to use L/Cs to finance its ongoing Power Rehabilitation Project (PRP).

Eurobond support

The lynchpin of ZESCO's financing for its PRP is a US$255 million Eurobond, which is currently being used to finance the rehabilitation of a hydroelectric power project as well distribution and customer service projects.

ZESCO says that government guaranteed L/Cs totalling US$173.43 million secured from local commercial banks also play an important role in its current project financing programme.

Continued L/C usage

The electricity company says that US$186 million of the Eurobond funds have been channelled to the Kafue Gorge Power Project while US$69 million is financing selected distribution and customer service projects.

The Eurobond has been used to leverage other forms of finance such as the L/Cs according to a ZESCO spokesman.

He says the state-owned utility intends to continue to use L/Cs in its capital spending programmes.

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