GOVT HAILS STANDARD BANK FOR PARTNERING TO IMPROVE LILONGWE’S TRANSPORT NETWORK: Signs K34.5billion finance deal with RFA for Kenyatta-Mzimba Road

…DEAL IS LARGEST LOCAL-CURRENCY FINANCED ARRANGEMENT

…STANDARD BANK PROUD TO HELP DRIVE MALAWI’S ECONOMIC GROWTH

…KENYATTA/MZIMBA ROAD IS MALAWI’S FIRST 6-LANE HIGHWAY

9th FEBRUARY 2023 (LILONGWE)—The Minister of Finance Honorable Sosten Gwengwe has hailed Standard Bank Plc for leading the private sector to facilitate economic transformation through financing of Malawi’s transport and infrastructure.

The Minister was speaking in Lilongwe at the official signing ceremony of the MWK 34.5 billion Kenyatta Drive and Mzimba Street Road rehabilitation project.

The agreement binds the Roads Fund Administration (RFA) as project implementor and Standard Bank Plc as the lead financier and joint arranger, Old Mutual as co-financier and joint arranger and Continental Asset Management as co-financier.

“The Government of Malawi would like to recognize Standard Bank, Old Mutual and Continental Asset Management, in their respective rights as  co-financiers, for financing Malawi’s development agenda. The upgrade of the Kenyatta Drive and Mzimba Street is a fulfillment of the MW 2063 Pillars 9 and 2, which state that Malawi will build resilient infrastructure, promote sustainable industrialisaton, promote innovation as well as develop low cost and competitive transport systems across all modes. Completion of the upgrades will lead to the decongesting of traffic and accelerate movement of people and goods in Malawi’s administrative capital,” he said.

The financial agreement clears the way to accelerate substantive construction works for the road, which will become Malawi’s first six-lane road. Preparatory and other ground-breaking works for the project begun in 2021.

“As government, we value the role private sector plays in this economy and we will therefore continue to create an enabling environment to ensure that our private sector fully engages itself in the economic development of the country. This financing partnership between the RFA and the consortium of financiers, would not have materialized if the environment was not enabling enough for the private sector to participate. Let me encourage other private sector players to emulate what the consortium of financiers have done,” said Gwengwe.

 As Joint Lead Arranger, Standard Bank Malawi raised MWK21 billion for the road construction.

Phillip Madinga, Standard Bank Plc Chief Executive said: “Our capability to finance a project of this stature highlights Standard Bank’s commitment to contribute to economic growth in line with our purpose which is “Malawi is Our Home, We Drive her Growth. The Bank has a desire to see the country achieve remarkable progress in key sectors such as roads and infrastructure.”

Old Mutual will contribute MWK11 billion and Continental Asset Management will contribute MWK2.5 billion towards the project.

Old Mutual Group CEO Edith Jiya said the investment and asset management firm shares the passion for the country to achieve sustainable economic growth and reduce poverty through infrastructure development as is case with the Kenyatta Drive.

 “We take pride to be associated with projects that improve Malawi’s transport networks, leading to better interconnection of our cities and direct positive impact to our customers and our nation,” she said.

Continental Asset Management Chief Executive Officer Gillian Kachikondo said the fund management firm has participated in the financing agreement on behalf of various pension funds under its care.

“Continental Asset Management is very excited to be part of this progressive project, which is expected to transform the city’s outlook and foster increased economic activity in line with Malawi Vision 2063,” she said.

RFA Chairman Matthews Chikankheni said the financing agreement demonstrates that it is possible for Malawi to undertake large and transformative infrastructure projects through public and private partnership.

 “It would not have been possible for the RFA to raise this amount of resources from its internal sources without negatively affecting some of its other road works financing needs,” he said.

 RFA will repay the funds over a 15-year period.