The Water and Power Development Authority has postponed its plans to issue its second green Eurobond amid high interest rates to FY 2023, Dawn News reported.
After its first issuance of a green Eurobond in May, the Water and Power Development Authority (WAPDA) intended to launch another one by March 2022 to raise $500 million.
Its Member of Finance, Naveed Asghar, told the national daily that “the local and international situation, especially in the wake of the current situation in Afghanistan, has turned the overall environment as not feasible to raise funds by launching bonds in the international market as this has led to over-pricing or increasing interest rates on Eurobonds meant for raising funds for the projects”.
WAPDA issued its first green Eurobond on 27 May to raise $500 million at an interest rate of 7.5 percent.
Asghar remarked, “At present, the interest rate has crossed 8pc and is going up gradually.” He added that “it is better for us not to launch another bond to raise $500m this fiscal year under a medium- or long-term note program”.
“Moreover, the funds we currently have are sufficient to meet our expense on the projects during this fiscal year,” he explained.
Asghar also highlighted the country’s expanding current account deficit, inflation risks, depreciating currency, the International Monetary Fund program’s reforms, and the political instability in Afghanistan as factors that have increased the Eurobond interest rates.
“We intend to go to the market again next year for another green Eurobond issuance in line with our capital expenditure needs,” the official told.
WAPDA’s green Eurobonds are intended to raise funds to finance the Diamer-Bhasha and Mohmand dam projects. It had planned to launch bonds regularly in order to raise a total of about $2.2 billion, which is needed to fund the two projects over the next five years.