Thursday, March 28, 2024

Zambia to build new hydro power plant

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Zambia plans to start building a major $1.5 billion power plant next year, which is expected to boost generation capacity by 600 megawatts (MW) when completed in 2017, a senior energy industry official said on Thursday.

Increased investment opportunities in mining, its economic lifeblood, have raised Zambia’s power demand, leading to an electricity deficit which authorities want to overcome by constructing new generation plants.

Israel Phiri, who heads a department charged with promoting private power investment in Zambia, said the government would engage the private sector to help build the Kafue Gorge Lower hydro power project in a two-stage tender process.

“This process is expected to last the whole of 2010 and if you want to talk about actual construction starting on site we are looking at 2011 and commissioning in 2017,” Phiri said.

The tender aimed to find a potential developer and allow time for selected equity partners to raise funds for the project, to be financed through debt and equity.

Phiri said the government would put up $250 million for the project, with the private sector injecting a similar amount.

“It will be a mix of capital, the government felt that if it is a 100 percent independent power producer, then the large equity investment would restrict the pool of suitable bidders,” Phiri said.

Phiri said the government participation would give confidence to the private sector and attract equity from a number of partners including Western donors, development banks and export and import banks.

“Once that equity is in place the project company itself will then borrow the rest of the money, which is about $1 billion from the open market,” Phiri said.

Phiri said the World Bank’s lending arm, the International Finance Corporation (IFC), the project advisors, had recommended the construction of a 600 MW plant and a reserve bay.

“The IFC recommended that we have a 150 MW bay for future installation when the market has developed to levels where we require the extra 150 MW,” he said.

Zambia generates 1,400 MW of electricity and consumes about 800 MW but demand rises to 1,500 MW at peak times.
[Reuters]

19 COMMENTS

  1. Long over due. Other sources of power generation should be explored at the same time to make the nation more proactive to demand needs.

  2. WELL DONE ZAMBIA, WHAT ABOUT INVESTMENTS IN SOLAR BASED INDUSTRIES. WE HAVE PLENTY OF SUNSHINE TO TAP AT A LOWER COST THAN HYDRO. PLEASE KINDLY ADVISE.

  3. Good to hear about the plans. However, like #2, I’m also wondering why not Solar Energy this time, since we already have a Hydro power plant in Kariba who’s capacity can still be boosted? Perhaps we simply have too little knowlegde on such things – anyhow, the plans are definately welcome as long as they are targeted at maintaining growth in our mining industry.

  4. This is good news, we need more projects of this nature.Zambia has potential to produce elctricity enough to cover a big chunk of southern africa, if only all the falls our country is blessed with were utilized .

  5. When Mwanawasa was alive it was announced that the power plants would be finished by 2014 but now its 2017. Whats happening? anyhow as long as there is a good solution and in good time.

  6. Scum bugs. They’ve been in power for almost 20 years, is this how long it takes them to figure out that power generation in zambia has been erratic for as long as I can remember. They know that elections are round the corner. Do not be fooled people, this is not a progressive GOV. As Trigo has rightly pointed at the fact that by 2014 the project should be completed. These chaps have to get serious and put the electorate first.

  7. Yes very long overdue. In Southern Africa we are blessed with the most water we should be self sufficient in electricity

  8. Nine Chale

    You can still invest in solar and wind power plants. The govt has been calling for private sector participation in the power sector. With power demand at an all time high, I don’t see why you wouldn’t invest in such a sector and I am sure a Zambian bank would be more than willing to finance such a business venture especially considering interest rates are expected to fall this year.

    So write up a business plan and go invest. I have faith in you.

  9. This is all talk, almost every month “we” are constructing a power station, just check the newspaper archieves!

  10. All above my brethren you have spoken well. In reality as Zambians we are
    supposed to be the richest southern African nation, if at all not the richest albekulan nation. 40% of the southern regions water resource lies in our dormain. Wind is vast in numerous parts of our country. All these would have been harvested for localized and export capital returns. We would not need the ravenous world bank or the devilish Imf. But no, our leaders had to kill the morale of our people the collective independent unity of our forefathers. The Europeans could only hold us back so much our own do the most damage. Let us become independent investors apart from the government. Lord Jesus hear my cry on my bended knees. Increase work and take away Zambian procrastination.

  11. Wind Power might be a bit far fetched for now but something we need to think about in the long run. With sun shine in abundance through out the year and solar technology simple and straight forward to develop, solar power should be at the helm of Zambia’s development plans. Whilst it up to all of us to come up with business plans, it is upon the Govt to put up strategies and incentives to promote this. To start with, higher learning institutions should have faculties dedicated to train indiginious engineers who in turn would develop the technology forward and sustainably. Teachers can be imported but it is not always a good idea to import investers. knowledge is power as you may deduce. I am gratified that we are mostly thinking in the same lines. Keep up the productive contributions…

  12. Hey, guys is not yesterday when the Indian vice president arrived that it was announced he has donated some money for the Itezhi tehzi. As one has said check the archives you will find alot of this information without action

  13. This is good development, I think we need now also to harness the thermal power we have alot of coal for us to have those power rationing and stoppages.

  14. #3 and # 8 nine Chale and Mr capitalist

    If any of you are interested in solar generation get in touch with Mr Lamba nyirenda he is doing a pilot project in Chinyunyu area near chongwe in lusaka province.

  15. Engines, how are you today. For sure, solar energy may be an option but this is a commendable job for now. Kudos to government. I am tired of loadshedding. Hope ZESCO wont have a lot of excuses coz those guys know how to abuse money on themselves.

  16. i thought this was under way already. wasnt this in the news sometime last year with the chinese being the builders?

  17. Bloggers #s 3, 4, 7 and especially #s 10 & 11 – That’s what I am talking about. Its time we Zambians (I mean you and I) rolled up our sleeves and got dirty. The poverty we are now experiencing now is much more due to our limited belief in ourselves. I for one refuses to say Zambia is poor. We are far blessed than most countries.

    I ve learnt a lot and I ve resolved to do my bit for mothet Zambia. In the next few months you will see me blogging from the sweet motherland. And dont tell me of how difficult it is to make it in Zambia. If we ourselves don’t change that perception, who will?

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