Zambia hydro projects advance on several fronts

The World Bank’s International Finance Corp. (IFC) reports feasibility study work has begun for the development of the 750-MW Kafue Gorge Lower hydroelectric project in Zambia.

IFC senior investment officer Javier Calvo told reporters in Lusaka May 13 that a team of technical and legal experts started feasibility studies this week for Kafue Gorge Lower on the Kafue River. Calvo said the team is expected to design the structure of the hydro project to be proposed to investors and expected to take six years to complete.

“The feasibility study, which would cost about US$6 million, is expected to be concluded within six months while actual construction is slated to start within three years,” Calvo said.

The IFC official said more than US$1 billion is required to build the power plant whose feasibility study has been financed by the Zambian government, IFC, the African Development Bank, and Development Bank of South Africa.

IFC awarded contracts totaling US$2.3 million to legal and technical-economic consultants to assist in development of the project. (HNN 2/28/08) Norton Rose of the United Kingdom received an US$800,000 contract to serve as legal consultant.

MWH of the United States received a US$1.5 million contract to serve as technical and economic consultant. MWH is to perform a power market review; a feasibility study, including meteorology, hydrology, geotechnical drilling, dam and facilities design, and transmission capacity studies; a financial analysis; and technical contributions for the implementation of the transaction.

India funding sought for 120-MW Itezhi-Tezhi

Meanwhile, the Times of Zambia reported an India diplomat said Zambia applied for a soft loan of US$80 million from the Export-Import Bank of India for development of the 120-MW Itezhi-Tezhi hydroelectric project, also on the Kafue River.

India’s high commissioner to Zambia, River Wallang said it was likely the loan would be approved soon, with a payback period of 20 years. He said it would allow quick implementation of the project.

A joint venture of Zambia Electricity Supply Corp. (ZESCO) and Tata Africa Holdings (Pty) of South Africa took bids in May for construction of Itezhi-Tezhi. (HNN 3/28/08) ZESCO and Tata Africa, a subsidiary of India’s Tata Group, have said the project should be commissioned by June 2012.

Zambia ministries push new hydro, rehabilitation

Zambia’s finance and energy ministries issued a statement May 11 launching an effort to overcome a power shortage that has forced power rationing in the critical mining industry and load shedding for other Zambian consumers. The ministries pledged to boost capacity through construction of new hydro capacity and upgrading of existing plants.

A team of senior officials from the Ministry of Finance and National Planning, the Ministry of Energy and Water Development, and ZESCO visited the 900-MW Kafue Gorge and 600-MW Kariba North Bank hydroelectric projects. (HNN 2/27/08) The ministries said the visit was to understand progress being made on Zambia’s Power Rehabilitation Project and investment plans for new generation.

�The team noted with satisfaction the steady progress being made in the Power Rehabilitation Project at Kafue Gorge and Kariba North Bank power stations,� the ministries said. (HNN 5/12/08) �The works at Kafue Gorge power station will be completed in December 2008 whilst those at Kariba North power station will be completed by March 2009.�

The ministries said they found a US$44 million shortfall in needed funds for the Power Rehabilitation Project and pledged to make the resources available.

With completion of the rehabilitation project, 450 MW will be brought back into service and an additional 210 MW will be added to the installed capacity of the two plants, the statement said. The ministries said that would bring Zambia’s total available power to more than 1,800 MW, reducing load shedding in the short term.

Official data shows that ZESCO generates 1,190 MW, short of the peak national demand of 1,400 MW.

New hydro projects to provide long-term solution

In the medium to long term, the ministries said, construction of new hydro projects is required. They said construction of Itezhi-Tezhi and the 360-MW Kariba North Bank Extension project (HNN 11/20/07) would cost more than US$600 million, while Kafue Gorge Lower is expected to cost about US$1.2 billion.

�In this regard, the government has engaged the International Finance Corp. of the World Bank to provide transaction advisory services,� the ministries said. �Other projects being promoted for private development include the (34-MW) Kabompo Gorge (on Kabompo River) and (160- to 200-MW) Kalungwishi.� (HNN 1/12/07)

In February, ZESCO said it was talking to financiers from Japan, India, and Western countries, seeking a US$600 million financing package to build and upgrade needed hydroelectric projects. (HNN 2/27/08)

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