The National Pension Scheme Authority (NAPSA) has defended its participation in the financing of the Lusaka–Ndola Dual Carriageway project, dismissing claims that it was directed by Government to fund the project and insisting the investment is secure and already generating returns.
In a statement NAPSA Head of Corporate Affairs Cephas Sinyangwe says, the concessionaire approached the Authority with a financing proposal, which was subjected to its normal investment appraisal processes before approval.
Mr. Sinyangwe has added that the pension fund committed US$300 million to the project as part of a total financing package of US$650 million. The facility carries an interest rate of 9.5 percent per annum and is structured over 13 years, including a three-year construction moratorium followed by a 10-year repayment period.
He has revealed that it has already received US$5.9 million in interest income from loan disbursements made during the first year of the facility.
The Authority also rejected suggestions that it should have been allocated toll gates directly to recover its investment, saying such claims misunderstand the agreed financing structure.
According to NAPSA, revenues from designated toll gates and other road-user charges are deposited into an escrow account from which lenders are repaid according to a predetermined hierarchy. As a senior lender, NAPSA said it holds first priority in repayment.
The Authority has described the project as a secure infrastructure investment backed by collateral arrangements designed to safeguard contributors’ funds. These include the collection of toll revenues and road-user charges through an escrow mechanism to ensure disciplined debt servicing.
NAPSA says the investment offers strategic benefits beyond financial returns, including diversification into infrastructure assets and protection against local currency depreciation because the facility is denominated in United States dollars.
The Authority estimates the loan will generate more than US$220 million in interest income over its lifespan.
The Authority assured members and stakeholders that it remains committed to safeguarding pension funds while pursuing investments that deliver sustainable long-term value.
By Rachel Mumba
