May 21, 2021 (MLN): Pakistan plans to raise $500 million next week with the sale of the first green Eurobond, which could pave the way for similar deals to fund hydropower projects.
According to a report by Bloomberg, Water and Power Development Authority (WAPDA) is looking to sell a 10-year note this month and intends to offer more environmentally friendly debt over the next two years, said Muzammil Hussain, chairman of the organization.
The country intends to tap increasing investor global demand for green debts as it pursues plans to increase renewable and hydropower generation to 60 percent of total electricity by 2030.
Pakistan is targeting 5% economic growth in the next financial year starting July from around 3% this fiscal year with the help of spending on major infrastructure projects. The funds from the proposed dollar bond will be used to finance the Diamer Basha and Mohmand dams, Muzammil Hussain underlined.
“We are taking a lead against fossil fuel,” the chairman said by phone.
Pakistan raised Eurobonds worth $2.5 billion in March, the first since 2017. Fitch Ratings affirmed its B- ratings for WAPDA, the same as for sovereign, earlier this year.
“The government currently provides a large share of financing for power-related CAPEX, but the policy direction for WAPDA is to expand its own indebtedness without the government’s commitment,” Fitch said at the time. “The government owns 100% of WAPDA and has a tight grip on its overall operation, including financing”, the report highlighted.
