ENERGICOTEL (ECTL) PLC, a member of EPC Africa Group, an independent power producer and an engineering consulting company has raised Rwf 3.5bn by listing a corporate bond on the Rwanda Stock Exchange via public offer. The firm sought to raise Rwf 3.5B in its first tranche with a 10 year bond with a 13.75 per cent per annum interest rate meaning they had a 100 per cent subscription rate. The firm in the long run seeks to raise Rwf 6.5B. The first tranche which received regulatory approval from Capital Markets Authority on June 18 is aimed at enabling the firm to refinance existing debt obligations to match its borrowing with long term contracts to optimize cash flow. Capital Markets financing is cheaper and more sustainable in the long run in comparison to debt especially for firms with long term growth prospects. This is part of the reason firms such as ENERGICOTEL would move to pay off debt obligations which would allow them to optimize future cash flows. Ferdy Turasenga, Executive Director of ENERGICOTEL noted in a statement that they attracted a diverse base of local investors with 80 per cent of funds from Institutional Investors with the rest taken up by retail investors. Currently, the firm operates three Hydro Power Plants namely: Keya, Nkora & Cyimbili. This makes the firm the issuer of the third corporate bond to be listed since the establishment of the RSE after the ones by the International Finance Corporation (IFC) and local lender BCR—which was acquired by I&M Bank. The development could also serve as proof of possibility for local firms to consider capital markets as an ideal source of capital as the local market seeks for alternatives to bank loans.
