The Zambia Electricity Supply Limited (ZESCO) and Sinohydro of China have signed a contract for the engineering, procurement and construction of the Kariba North Bank extension hydro project at the cost of US$ 243 Million.
ZESCO Managing Director, Rodney Sisala signed for ZESCO and Sinohydro contractors Deputy Managing Director, Song Dongsheng signed on behalf of the company.
Speaking at the signing ceremony in Lusaka today, ZESCO Managing Director, Rodney Sisala said the project will be an extension to the already existing Kariba north bank PowerStation expected to be completed with four years.
Mr Sisala noted the extension which is will be a 360MW capacity plant underground adjacent to the existing machinery will increase capacity of the kariba north bank to 1080MW from the current 600MW.
He explained that 85% of the total cost will be provided by China Export Import Bank (China EXIM Bank) adding that the balance will be sourced from other financing institutions.
Mr Sisala noted implementation of the project will commence in early 2008 as soon as the financial discussions are completed with China EXIM bank.
He said that ZESCO and Sinohydro have agreed to accelerate the development of the project in order to caution the power supply deficit which Zambia is faced with.
Speaking at the same function, Energy and Water Development Minister, Kenneth Konga said that the signing ceremony marks a milestone in the development of power projects in Zambia as government has set targets for household access to electricity that require large amounts of power.
Mr Konga noted that there has been a rapid demand for electricity in Zambia and the region adding there is need for new power generation if the looming power deficit is to be controlled.
He noted that studies by the Southern African Power Pool (SAPP) have shown that due to the high economic growth taking place in the region, the demand for power will exceed the installed capacity from 2008.
Mr Konga observed that hence there is need for Zambia to take deliberate steps to develop new poor generation sources as it will have few alternatives of importing power from neighbouring countries as most of them will face similar situations.
He urged ZESCO and Sinohydro to accelerate their efforts to ensure that the project is implemented without delay.
Mr Konga noted that the shortage of power will not only affect the existing economic infrastructure but will also act as a barrier for other prospective investors.
Speaking earlier, Sinohydro Deputy Managing Director, Song Dongsheng promised to do quality works and within the stipulated time.
And China EXIM Bank General Manager, Dai Chunning said that the Chinese government is honoured to assist Zambia to help solve the electricity deficit.