Rwanda Stock Exchange on Monday officially started trading the first-ever corporate bond issued by Energicotel, a local private energy development firm.
The Minister of Infrastructure, Claver Gatete, presided over the launch of the listing of the Rwf 6.5 billion long-term fixed rate corporate bond.
The bell-ringing ceremony was also attended by several government officials, particularly from the finance sector, as well as investors.
The firm, a member of EPCA Group, is an independent power producer and an engineering consulting company.
In Rwanda, they operate three hydropower plants, with a combined installed capacity of 3.3 MW. Data from the infrastructure ministry indicates that the firm supplied 17 million kWh of electricity to the national grid last year.
“Moving to the capital markets is an essential step towards showcasing additional avenues for capital formation and providing a platform for investors to participate in the ENERGICOTEL investment plans,” said Ferdy Turasenga, firm’s executive director.
According to him, investors can expect a good return on investment since the firm has committed a 13.75 percent fixed interest rate on its first tranche.
Two weeks ago, the first tranche received a full subscription.
The funds, he said, have been earmarked for refinancing the existing bank loan, investment into operational power plants, and bond issuance-related expenses.
“We are excited to continue on our growth trajectory within the renewable energy space, with our core business of power generation and engineering consultancy” Turasenga added.
Commenting on the issuance of the bond, Pierre Celestin Rwabukumba, the CEO of Rwanda Stock Exchange, said that its subscription of 80 percent and 20 percent of institutional and retail investors respectively, is a testimony of confidence investors have in the company as well as its business prospects.
“But it is also a vote of confidence in the steadily growing capital market as a platform not only for big companies or governments’ but also the SMEs and other corporates that are seeking long term and sustainable finance,” he added.
Rwabukumba shared similar sentiments with Eric Bundugu, Ag. Executive Director of Capital Market Authority, who said that the successful subscription of the bond, exhibits investors’ continued growing appetite for more and diverse products in the capital markets industry.
“It also provides a great opportunity for investors to be part of Energicotel’s continued success,” he said.
Increased resources to sector development
Speaking at the ceremony, Minister Gatete applauded the company for being the first firm in the energy and infrastructure sector generally to list a corporate bond.
“This adds more resources to energy sector development that will help to achieve the Government’s target of 100% electricity access countrywide by 2024.”
He also pointed out that it was a good signal that the market is slowly getting ready for the private sector to tap into the opportunities the market has to offer with a target to have a private sector-led economy.
Gatete highlighted that the government is currently working with the energy firm on various projects, including construction of power transmission lines, distribution lines and energy access, in most parts of the countries, connecting homes, schools, health centres and other economic activities.