Indeni strategy gets backing
GOVERNMENT is at liberty to pursue different capitalraising options to finance the various projects at Indeni Petroleum Refinery Limited because the cheapest form of raising capital is by finding a suitable equity partner who will bring the finances required to undertake various projects, Energy Forum Zambia (EFZ) has observed.
Commenting on the reports that Government was looking for a partner to invest in Indeni Petroleum Refinery Limited, EFZ chairperson Johnstone Chikwanda described the deal as a sweet prospect that will help raise capital other than borrowing which he said was not an appropriate option currently.
Mr. Chikwanda, who is also immediate-past chairperson of the board of directors of Indeni Petroleum Refinery Limited, said there was need to applaud rather than demonise Government for the step it had taken because it was the best as closing the refinery would be costly as the country would be forced to concentrate on importing refined fuel.
“Government is at liberty to pursue different capital-raising options in order to finance the various projects at Indeni Petroleum Refinery Limited because the cheapest form of raising capital is by finding a suitable equity partner who will bring the finances required to undertake various projects.
“The Indeni prospect is a sweet prospect for the investment community who understand fuel business. The other option of raisin capital is to borrow money but borrowing may not be prudent at this juncture. The worst case scenario would have been to close the refinery and concentrate on importing refined fuel. To this end, Government must be commended in that it is still committed to keeping the refinery and improving upon it,” Mr. Chikwanda said.
Meanwhile, Mr. Chikwanda noted that Government made a bold decisions in 2017 to remove subsidies in the sector which included the removal of fuel and electricity subsidies, launch of exploration works for oil and gas and coming up with sector reforms after making wide consultations.
He said those reforms had seen greater and deeper inclusion of local content participation in the sector which also saw increased progress to solar energy deployment and the 750MW Kafue Lower Gorge power project.
“Government also embarked on conducting road shows for the Batoka Gorge power project with Zimbabwe. With greater stability returning to Zimbabwe, this project will enter into success phase. It was a very busy year for the sector in which we saw very strong political will being demonstrated President Lungu.
“Zambia has never had a president who has committed so much to diversification of the energy mix. We have seen that load shedding has virtually been brought to an end. Government is expected to enter in harvest season by 2019 with great prospects cantering on results from oil exploration works and completion of some measure sector projects,” he said.
He also noted that there was increased vigilance by law enforcement agencies including Zambia Revenue Authority (ZRA), as seen by the bursting of fuel smuggling syndicates as such parties, including the general public, were encouraged to report any acts of economic sabotage through fuel smuggling.