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Vol 61 No 21

Published 22nd October 2020


New debt demand as bondholders defer decision

A local company goes to court to recover $300m from the state power utility as bondholders postpone a vote on the government's request for debt relief

The operator of the country's only coal-fired power station, Maamba Collieries Ltd., has opened arbitration proceedings with Zambia's state-owned electricity utility Zesco to recover US$300 million it is owed for electricity supplied to the grid, Africa Confidential has learned. A judgement in MCL's favour could eventually force the liquidation of Zesco assets to meet the bill and cause other debt dominos to fall, further increasing the already high risk of sovereign default. Zesco's debts are guaranteed by the state. Public finances already cannot meet the bond coupon payments, making it unlikely that the state can bail out Zesco.

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