Zambia NRFA Presentation on Infrastructure Bonds 2012

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Zambia NRFA Presentation on Infrastructure Bonds 2012

Zambia NRFA Presentation on Infrastructure Bonds 2012

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  • 1. Sector Evolution ± After independence in 1964, road development strategy was through the National Development Plans (up to 1983) ± Focus was construction of new roads for economic development by linking the towns ±  Additionally, trunk roads were constructed for international connectivity ± Road network increased to over 67,000 km, valued at over USD 2.3 billion  ± Due to poor maintenance, by the 90s, road condition had deteriorated – over 80% poor ± Huge resources needed to rehabilitate network – over US$ 1 bn, which Government could not manage
  • 2. 2
  • 3. RoadSIP Sector Strategy (CRN)
  • 4. The Core Road Network RoadType CRN (km) Trunk (T) 3,116 Main (M) 3,701 District (D) 13,707 Urban 5,597 Primary Feeder (PF) 14,333 Total 40,454 ± Total gazetted Road Network is 67,671 km ± RoadSIP II focuses on CRN (40,454 km) necessary for economic development
  • 5. Year   GRZ Budget US $ Million   Fuel Levy US $ Million   ORUCs US $ Million   Others US $ Million   TOTAL US $ Million   1995   -   15.32   -   -   15.32   1996   -   8.78   -   -   8.78   1997   -   10.27   -   -   10.27   1998   -   12.35   -   -   12.35   1999   -   8.46   -   -   8.46   2000   -   7.26   -   -   7.26   2001   12.44   9.32   -   -   21.76   2002   9.93   10.61   -   -   20.54   2003   11.57   8.33   -   -   19.90   2004   4.89   24.07   -   -   28.96   2005   5.63   39.23   -   -   44.86   2006   19.71   55.10   -   -   74.81   2007   33.76   56.22   24.02   1.72   115.73   2008   40.13   51.10   39.87   2.94   134.05   2009   59.30   61.87   43.20   1.65   166.02   2010   100.77   69.44   41.58   2.94   214.74   2011   284.67   126.00   53.77   5.11   469.54     Total   582.82   573.75   202.43   14.37   1,373.36   Traditional Local Sources of the Road Fund
  • 6. Year World Bank US $ million EU US $million Denmark US $million Japan US $million Germany US $million Others US $million Total US $million 2001 26.09 25.21 - 11.11 9.44 9.92 81.78 2002 4.73 14.54 1.04 27.20 15.26 9.12 71.88 2003 37.78 6.67 10.00 11.46 13.60 13.01 92.52 2004 11.61 - - - - 18.45 30.06 2005 5.27 - - - - 18.91 24.18 2006 64.63 34.97 20.10 - - 17.10 136.79 2007 55.89 38.02 11.04 - 0.50 9.43 114.88 2008 48.34 65.84 11.01 2.68 0.32 9.74 137.93 2009 32.93 9.00 12.87 2.67 0.59 9.59 67.65 2010 8.73 - 2.08 - 1.09 0.42 12.32 2011 13.53 - 11.95 - 3.90 153.66 183.04 Total 309.52 194.24 80.09 55.12 44.71 269.34 953.03 6 Traditional External Sources of the Road Fund
  • 7. AWP 2013 FUNDING SOURCES [ZMK MILLIONS] No. Fund Source Ceiling Driven 1 External 822,170.4 2 GRZ 1,590,039.2 3 Road Fund - Fuel Levy 886,718.8 3,298,928.4Total Budget Sum Ceilings 822,170.4 1,590,039.2 886,718.8 3,298,928.4 25% 48% 27% Funding  Sources External   GRZ   Road  Fund  -­‐ Fuel  Levy
  • 8. Maintenance Needs (CRN) ± SNDP projections => US$4.1 bn ± Rehabilitation & Maintenance Needs 2012-2016 => US$4.5 bn; ± Yearly Requirement => approx. US$900 m ± 2013 AWP => US$650 m; but large portion is upgrading (more than 40%) ±  Need to balance between upgrading and maintenance
  • 9. LINK ZAMBIA 8000 NEEDS (2012-2017) Projects are scheduled to be implemented as follows: ±  Phase I Projects (2012) ±  Total length 2,290 Km in Lusaka, Eastern, Muchinga & Northern Provinces ±  ZMK8.0 trn (US$ 1.6 bn) ±  Phase II Projects (2013) ±  Announced by His Excellence the President of the Republic of Zambia ±  Total length 3,049 Km ±  ZMK11 trn (US$ 2.2 bn) ±  Phase III Projects (2014) ±  Total length 2,862 Km ±  ZMK9.0 trn (US$ 1.8 bn) ±  Total for prog – ZMK 28 trn (US$ 5.6 bn) ±  Total per year – ZMK 5.6 trn (US$ 1.12 bn)
  • 10. Link Zambia 8000 Map 10
  • 11. CURRENT AND PROPOSED PROJECTS LINK ZAMBIA ±  8,200 Km across Zambia at ZMK28.4Trillion (US $5.42 billion) over 5 years PAVE ZAMBIA 2000 —  Construction of 2000 Km of urban roads in 10 Provinces, over Five (5) years at ZKM1.6Trillion (US $307 million) L300 —  Construction of 300 Km of Lusaka urban roads at US$348million - 85% loan from China Exim Bank (US$300m) and 15% by GRZ Completion of on-going projects —  Routine , Periodic Maintenance activities and rehabilitation needs of on going GRZ Projects at ZMK25.0 trillion (US $5 billion) over 5 years
  • 12. Financing Gap According to SNDP — “COMBINED” needs US$ 11 billion for next 5 years (including maintenance needs during the next 5 years on CRN and upgrading) — Total SNDP allocations for next 5 years – US$ 4.5 billion — Financing gap – US$ 6.5 billion — Financing gap/year – US$ 1.3 billion 12
  • 13. BRIDGING THE GAP ROAD BOND PROPOSAL —  Road Sector together with other infrastructure sectors, share the US $430 million from the Euro Bond available for use now. —  NRFA will issue an additional USD1 billion road bond in three installments of US D350 million over three years —  The fuel levy and Road User Charges would be used to redeem Bond. —  Proposed bond will be made on the local/domestic market. —  Tolling of Roads- The RDA in collaboration with other Road Sector Agencies is in the process of implementing the National Road Tolling Programme aimed at broadening the financing option
  • 14. 20
  • 15. Thought of the Day: