ZESCO is talking to financiers from Japan, India and western countries about a $600 million financing package needed to boost power output, a senior industry official said on Tuesday.
Monica Chisela, ZESCO senior manager for marketing and public relations, said the $600 million would be initial funding for power projects which are anticipated to cost a total $2 billion to raise power output to 2,500 megawatts.
Chisela said ZESCO was negotiating with export credit agencies, the World Bank and other financiers.
“ZESCO is sourcing funds from Development Financial Institutions like the African Development Bank, World Bank . . . export credit agencies like India Exim (and) Japan Exim,” Chisela told Reuters.
Chisela said ZESCO planned to raise power generation to fix a deficit which has forced industry to reduce output.
“In the short to medium term, about $600 million capital investment is required by ZESCO and over $2 billion capital investment is required in the long term,” Chisela said.
Chisela said infrastructure expansion was already in progress and that it was being done under a government-driven power rehabilitation project (PRP).
She said the country’s largest power project would be the Kafue Gorge Lower, which is estimated to cost $1 billion. The government has engaged the World Bank’s International Finance Corporation, to undertake a feasibility study.
“It is anticipated that, under the current cost estimates, it will cost about $1 billion to construct Kafue Gorge Lower Power Station,” Chisela said.
Chisela said expansions and upgrades at the other two power stations, the Kafue Gorge and Kariba North Bank were expected to be completed in December 2008.
“It has been estimated that developing the Itezhi-Tezhi Power Station will cost $230 million and construction works will commence before the end of 2008,” Chisela said of the project awarded to Tata Group of South Africa and targeted to be completed by 2012.
Zambia, like many other southern African countries, has been hit by power outages which have forced copper and cobalt mines to scale down production.
Officials say the country cannot meet demand from the mining and agriculture sectors, where expansion in the last couple of years has not been matched by investments in power generation.
ZESCO data shows that 772 megawatts is currently generated from a capacity of 1,300 megawatts, while total Zambia power demand is 1,600 megawatts.
“The current maximum demand is 1,600 megawatts and it is anticipated to reach 2,500 megawatts in the next five years,” Chisela said.
It is a pity that all that this parastatal company knows is to source for loans or is it external support. If I may ask how many loans has this company gotten before and how has that money been used. I cannot see any meaningful development even if US$ 1 trilion was made available with the kind of management at helm. It is also a pity that we the domestic clientale continue to pay for the service that is never satisfactorily supplied, thanks to their dubious billing system. Can this company steamline its billing system to match the actual consumption. I am tired and sick of always having to go and quarrel with the billing unit at the Kabwata outpost. Please hear me.
Just to digress a little, I think the Zambian authorities chasing the Zamtrop money should take this orportunity to get bank account details obtained by Germany from the secretive principality of Liechtenstein. They are being offered to many countries in Europe to track down nationals who have been evading tax. They may find trails leading to Chiluba and company.
You are spot on #1. There should be a new management at ZESCO, one that has vision. Now that’s when they are trying to source for funds to expand the power generation capacity. I think it’s rather late, when the new mining industries are about to come online. Will there be enough power in the mean time? Actually if ZESCO was a private company they would have made this investiment early, and now they would be tapping their fingers.
Privatise ZESCO and we shall not worry about their borrowing arrangement. As things are, ZESCO wants to enjoy now at the expense of the future generation. This must be stop at all costs
#4, how many zambians are we?
The money is looking for will be just plundered by top management!
$600 million my a$$! That statement made by Zesco is meant to dupe all of you Zambians. South Africa is no longer having blackouts coz we are now the ones exporting 750 megawatts to there at a price four times what the local amount would fetch.
This govt has no care or remorse for its own people. We are just dealing with a bunch of greedy imbecilic cyclic redundant politicians that will say anything so u can believe them.
And is the position of ZESCO senior manager for marketing and public relations only for sluts or what?
It’s for anybody that’s studied PR and marketing. Get with it
It seems like ZESCO has taken advantage of the fact that it has no competitor because these guys are getting money from us every month and yet they are saying that they need money to finish certain projects since when did have they been saying that they are broke, I mean these guys charge us all the time even if we haven’t had power for many days of the month. with them there i no exception but to pay I mean that with us we have no say but to pay full amounts for the bills but with them they are so fast to tell us that they have no money if you understand what am saying.
I think it is high time gov had to put it’s foot down and do something with ZESCOs’ management we are tired.
Zesco in my view should do a proper SWOT analysis. The problem that Zesco has is lack of corporate resources (the 5Ms) and it is not all the 5Ms that are lacking, it is only the Managing Director. The man is non functional. Replace the man and get the coy going.