The Water and Power Development Agency (WAPDA) has successfully issued $ 500 million to international Investors, at 7.5% mark-up rate, forging a major deal not only for Pakistan’s Energy sector but also clearing the way for the country’s first green bond issuance.
Initial data suggests that the bond issue was subscribed more than four times, resulting in bids of $ 2.2 billion which helped in lowering its initial estimate of 8% mark-up.
The bond issue is seen as another positive development for the government, which announced that the country’s economy grew 3.94%, a sharp rebound from last year’s downturn.
WAPDA chairman Muzammil Hussean, quoted by Bloomberg prior to the bond issue, said Pakistan’s economy will get some breathing space as WAPDA is all set to issue Environmental friendly bonds over the next two years.
The proceeds from the bond will be used to finance the construction of the Diamer Basha and Mohmand dams.
The WAPDA bond issuance came at a time when green Bonds are in increased demand of Investors and Pakistan’s plans for further development of renewable energy and hydropower projects financed through these debt markets.
In March 2020, Wapda received a ‘B-‘ or ‘stable’ rating from rating agencies including Fitch and Standard & Poor’s (S&P).
Pakistan previously has raised $ 2.5 billion worth of Euro bonds in March-2021, which were also oversubscribed.
The increased participation from International Investors in Pakistan’s Bond issuance conveys increasing confidence in the economy.
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