Zambia signs $1.5 billion power plant deal with China

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Finance Minister Situmbeko Musokotwane and Chinese Ambassador to Zambia Li Quiangmin exchange documents after signing various bilateral agreements in Lusaka

Zambia and two Chinese companies signed an agreement on Friday to build the Kafue Gorge Lower Power plant at a cost of $1.5 billion, Finance Minister Situmbeko Musokotwane said.

Musokotwane said construction of the new power plant, key to boosting power supply in Africa’s largest copper producer, would start in April 2011, with the initial $1 billion funding expected to come from the Chinese.

“Zambia together with China Africa Development Fund and Sino-hydro will form a company which will develop the Kafue Gorge Lower project,” Musokotwane told journalists.

The Kafue Gorge project is expected to add 600 megawatts of power to the national grid in Zambia, where power demand is expected to rise due to the opening of new mines.

Zambia, which has had no major investments in power generation for decades, has previously been forced to import power from the Democratic Republic of Congo (DRC) following regular power outages, partly caused by ageing equipment.

[Reuters]

49 COMMENTS

  1. +1
    0
    vote

    There is no excuse for Zambia or any African country for that matter to be struggling with power supply given the adequate resources we have! Zambia has abundant coal resources as well as Uranium.It is high time we set up Thermal and Nuclear power plants which in my opinion will be highly sustainable due to the availability of resources. What we need from the Chinese, Russians even Indians is the technology. Government should raise money for the projects and our engineers can do the job!

  2. vote

    with the initial $1 billion funding expected to come from the Chinese.

    Load contraction in style. . .

  3. vote

    When will the Zambians build their own infrastructure, with out crying for the chinese to do it for them; there is adquate money in Zambia to do such jobs; what is missing is proper management from the govt powers

  4. vote

    Good Evening

    The expenditure of billions of dollars is not a guarantee that electricity will be up and running. Huge amounts of money have already been spent on these power plants, but their ability to feed the national grid has been undermined by a nationwide lack of coordination.
    In my opinnion, countries facing power deficits would do best to turn to other (cheaper) alternatives, for instance gas-powered plants to meet their future domestic energy demands. We have seen it work out in Europe.

  5. vote

    #4 & 5, are those serious statements? You make me almost cry that Zambia has citizens who think like you. Maybe you should restrict yourselves to the Zambian political area where any comment is worthwhile news and people will rush to buy the newspaper.

  6. vote

    no 4 and 5 are not serious comments. gas powered plants???? where will the gas come from? gas is not cheap it is just cleaner technology but you still need to have gas in order to produce power from gas. this is very good investment for zambia and in fact we have one of the best hydro power potentials in africa and we should utilise it.

  7. vote

    lets be serious in our comments. whats wrong with you guys? even good news like this we dismiss. are you forgetting that China has recently successfully built the worlds biggest hydro power dam “three gorges” dam. so this deal makes sense for zambia and will ensure we get cutting edge technology

  8. vote

    I think this deal is good. Zambia and most of SADC are facing power deficits due to increased economic activities. Power demand is getting higher and it is important that we try to meet this demand if our economy is to expand further.

  9. vote

    Build more! We have good rivers! Luapula, Eastern, Southern, Western, N. Western, Northern can all give us big hydro power stations!

  10. vote

    This is good news. I wish Zambia had all the Tech to undertake is project by its self. all the chinese money would have empowered the local companies. We all know that the most beneficiary of that money with be South Africa and China.
    Zambia in debt for the next 50 years.

  11. vote

    LOADS OF MONEY…I WONDER WHY THE CHINESE ARE BEING SO GENEROUS! NEW MASTERS I RECKON…I ONLY HOPE WE ACCOUNT FOR EACH DROP…ONE BILLION US…ITS ON!!!!!!!!!!!!

  12. vote

    The trips that RB is making abroad are bearing fruits. I wonder what spin Sata will put on this one !! On the other hand to those that have made suggestions…

    A) Zambia cannot afford NuClear Power Stations
    B) The life Span of Coal is not long enough and this is old technology
    C) Gas is not even an alternative and its not feasible for Zambia. Where will gas come from?

    The only natural power source we have is water, which is very free to us. Wind Mills and Solar are other alternatives. And from the look of things Solar is playing a part in Zambia so far, especially in rural areas.

    The truth of the matter is Zambia has no money. We dont export much. We are even failing to promote Tourism to the rest of world.

  13. vote

    Electricity Power demand will continue. Fundamentally, African countries are rising Emerging Markets. Because we have started to depend on some of our local industries, that it self becomes a worry for the Western Countries. Reason being that they will not have where to dump all there products. Zambia & Malawi has had good yields of Maize, this will push down the price of USA corn/maize. So far the US maize exporters are getting Pissed-Off due to low demand of Corn from Africa.

    Take Britain (UK) the exports have gone down in the last number of years. David Cameron has started jetting around the world like Rupiah Banda, looking for business partners. The world has become very competitive…

  14. vote

    #3,Power, Yes this is a serious statement. I am in India right now, come and see how these people are managing and developing the power sector without external help using their own resources and scientists/engineers.Zambia has capable scientists and engineers, that you must agree to. Do you know that the Director for safety operations for the International Atomic Energy Association(IAEA) for Asia-Pacific region is Zambian? Dr, Kaluba Chitumbo! Secondly natural resources such as coal used for Thermal power plants is readily available? I do not know if you have noticed but in many years ago power in Zambia used to come from thermal power plants, you can see the cooling towers still standing in Ndola near ZESCO depot and Lusaka! So what we require is simply funding and technical assistance.

  15. vote

    #3,Power. continued……What profession are you in firstly? I hope you understand what cooling towers are. Mudala this can be done, for us long as we have negative people like you doubting your own potential,Zambians and Africans will always lick white peoples ass and lag behind in development! South Asia is becoming technologically advanced, something the West thought it was impossible! Right now a lot of American and European companies are interested in partnering with Asian countries why? Mudala it is about time we moved forward as a country!

  16. vote

    for goodness sake please give the so called engineers and their professors at Unza something to think about. We can not continue churning out engineers year in year out to tar roads and sit in tutemba offices as consultants. How about turning the school of engineering into a piggery because its just a drain on our meagre resources or turn it into flats for chinese labourors. Kanshi bukaca lisa mwefibantu imwe?

  17. vote

    If Africa was united as envisioned by the late Kwame Nkrumah we should have just built one big hydropower station on the Congo River in the Congo at Inga capable of producing 40,000 MW to cater for most of Africa’s power needs instead of tuma 600 MW here and there. There is so much water in the Congo River part of which is contributed by the Luapula River that you do not need a storage dam. Africa should not be poor with resources like this. But since this is not possible the Kafue Lower hydropower project is a positive development which is long overdue.

  18. vote

    # 1,16,17achimwene : i do agree with you more than 100% that is the kind od mentality Zambians must have, we have the naturla resources, we have people who can do the job, what we need is to know or learn the technology which countries like China, South Korea, India and the west are using then do it own our own. Through our natural resources we can get income and be more self reliant. Hey lets be in contact w can work together if you dont mind, i can share more and exchange notes crazyjay AT mailingaddress dot org i have used words as it may not show with LT site. contact me.I have great plans and would like to work with more people like you.

  19. vote

    Achimwene. Yes, Zambia is endowed with a wide range of energy resources apart from petroleum. Proven coal deposits are estimated to be 30 million and probable coal reserves of several hundred million tonnes. My reservation on the use of coal is global warming or climate change which has the potential to cause massive ecological and human devastation. Why should Zambia use energy from coal which is regarded as “dirty” when it has 6000 MW of unexploited “clean” hydropower energy at places like Batoka Gorge, Kafue Gorge Lower, sites on the Luapula River etc? But then again it can be argued that other countries like USA, RSA, India, China etc have developed on the back of coal energy admittedly during the time when global warming was not known.

  20. vote

    Wanzili I share your frustrations. EIZ is trying to bring standards to the fore but the Zambian engineer is struggling. When did we start dicussing hydro power schemes and yet what? Perhaps we need a Ministry of Engineering

  21. vote

    #17, you amuse me thoroughly. Please read what other knowledgeable people are saying above.
    And while you are in India please make sure you understand the genesis and meaning of what you see, otherwise you will come back to Zambia with dangerous “knowledge”.

  22. vote

    This project has been on the cards for many many years. This is one of the best news items in Zambia and we should all be proud of what the government has done to get this project going.

  23. vote

    #15, Agreed 100%. Goes to show that MMD is not short of leaders. Those who aspire for 2016 better sharpen your brains, here comes a formidable opponent: cool, educated but humble, knowledgeable, young, exposed and just about all the good attributes we should have in a future president of Zambia. Well identified by RB and his predecessor. That is as it should be, a good president identifies talent and leaders and lets them work for him; of course you have to balance your act so you sprinkle the cabinet with a few party cadres here and there to give a human perspective to the think tanks.

  24. vote

    LT, WHERE ARE YOUR WRITERS/JOURNalist? MAGANDE WAS BEATEN TO PULP BY MMD CADRES AND I DONT READ ANYTHING LIKE THAT! ……….FWAKA!

    The only good decision by RB though there will be nichekeleko i know. Chinese & indians dont just do things without underhand methods.

  25. vote

    Ubupuba pa Zambia!!! The Chinese will give you money and the Chinese will build with their shoddy contractors! And then the Chinese will buy Zesco from your sorry a.s.s.e.s and by the time you know it you are owned by them! Why not use the Africa Development Bank? At least they work with the German Central Bank (KFW) and they are usually honest in their deals as evindenced by the Water Companies they helped set up.

  26. vote

    #26 don’t expose your ignorance and your habit of constantly suspecting that your shadow is stealing things from you. The only time you rest is when the sun sets and you don’t see your shadow. The kafue lower project was thoroughly assessed by none other than the IFC (world bank group) just a few months ago. They arrived at that huge project cost of $1.5billion and stated that for the project to take off, it needed a consortium of financiers. Please shut up and let RB work for those of us who appreciate development in Zambia.

  27. vote

    #23,Ba Power I am fully aware and understand what I am saying. Did you get my previous comment, I will repeat that if you have noticed Zambia has used thermal power plants before. Yes I know the issue of global warming is there is currently what is called clean development mechanism(CDM) as one the solutions curb green house gases! Technology and efficiency in thermal power plants has improved remarkably and it is estimated that thermal power plants globally will continue being the largest source of power for at least the next thirty years! These are hard facts my friend!

  28. vote

    #27, why don’t you ask the African Development Bank and KFW, (or even the World Bank) whether or not they have that kind of money, and the appetite to finance such a huge project? And indeed whether they have been approached?
    You seem to assume that no one has been thinking about these things or even searching globally for that kind of money to finance this project.

  29. vote

    Yes Zambia has used thermal power stations before as the cooling towers could testify. In the 50’s when the power demand on the mines increased the option of importing more coal from Wankie to run the thermal power stations would have resulted in the expansion of the railway line and rolling stock which was found unfeasible. The construction of the Kariba Dam was chosen. That’s how themal power stations died.Although the Kariba dam was constructed to cater for increased power demand on the CB the power station was constructed on the Zimbabwean side. Engineers choose projects on the basis of the least cost. No body is saying that a thermal power station can not be constructed if it is found feasible not withstanding its impact on global warming but it was not found feasible in the…

  30. vote

    #30 achimwene, I hope this will clarify issues. There are many types of fuel that are used for generating electricity in the world. Some of the major ones are nuclear, hydro, coal, gas, heavy fuel oil, diesel, solar. What fuel you use in your country is determined by your country’s natural resource endowments, the costs of developing the resources, environmental factors including global warming, how long that resource will be available to run the plant (e.g. coal availability), the capital and running costs of a particular type of plant, the technical capacity and level of technological development of your country, (continued)

  31. vote

    The energy sector has been liberalized for quite some time. Unlike in the past where ZESCO had the monoply, there is nothing to stop an Independent Power Producer (IPP) from setting up a thermal power station at Maamba. However, most potential independent power producers have complained about the low tariff, which makes the projects unfeasible. The issue of pollution can be resolved with ECZ.

  32. vote

    (continued from 33) the ability of your country to manage a potential disaster (e.g. nuclear), the willingness of financiers to fund a particular project , the affordability of the electricity that you will produce etc etc the list is long but these are established by feasibility studies (which most political commentators in this country might call a waste of money). Coal is one viable option for Zambia and so is hydro, but unless you want more information I end here because this is a long multi-disciplinary subject. I reference you to Senior Engineer RTD who certainly knows this subject very well.

  33. vote

    #31 Power Just because the Chinese are quick to give the money does not mean their interest are share by the Zambian people. Yes we need to develop the Hydro Power in our country but at whose expense. These criminals running our country are behaving like a group of irresponsible college kids with a credit card. This loan might sound plausible but how much have they borrowed to date? The Chinese will be more that happy to lend because it gives them leverage over this country. This money is not free money and it will have to be paid for by the Zambia people who were never consulted!!!
    There was a reason why Kfw could have refused if at all they were approached. Those are Germans and their work ethics are very strict. They don’t entertain stealing! Unlike the Chinese

  34. vote

    Why should there be opposing views from this good piece of information about developing more power sources. RB and Mosokotwane (SM) are strategic. they know very well that in 4 to 5 years time there will be power deficit and hence the investment. only PF kaponyas can oppose good works. Contruction industry, agriculture, MFEZs , shopping malls name them are springing up everywhere in the country including building of schools and hospitals countrywide. all these will need energy & the MMD and RB & SM in particular know this fact. they dont want to be cought unawares due to lack of strategy as is on the part of PF who want to continue cousing confusion at funerals. by the time the PF would want to market themselvels in 2016 no one will listen to them with that kind of thinking. 2011 FORGET

  35. vote

    You may be camped in America and have criminals like Shansongo pulling the strings but eventually the people will prevail!

  36. vote

    Is #5 a serious comment? Yes, it is. If you research properly, you will find that there is immense availability of offshore gas in the Gulf of Guinea and also in large parts of the West and South African coast. There is strong potential for Africans to explore their local industry of relying on other countries to finance their problems.

  37. vote

    #36 Ask KFW and they will clear your ignorance. There is nothing like stealing. I may add that the problem with thieves is that because they are thieves, they think that everyone else is. That is the problem with some so called leaders who spend their time accusing others of theft without substantiating. The real issue is that they are either ignorant or they would be stealing if they were in power or both, but we know them by their characters.

  38. vote

    #36 it seems Achimwene is sharp and has picked the plot. In contrast you seem to be thick and just parroting whatever lies you have been fed on.

  39. vote

    #36, from your hatred of Chinese invetsment, I did not notice that you are just parroting the great leader of the 90 days fame. Sorry for the oversight.

  40. vote

    NO! PLEASE NOT AGAIN!! – Are we ever going to learn? Have’nt we realised that despite them owning/ implementing superior and world class projects in their own country, the Chinese can never put up any quality or durable infrastructure in a poor country such as ours. Unlike western countries the Chinese will just dump their inferior technologiy at Kafue Gorge, which will perpetually break-down, and can only be repaired and understood by their own people. All designs, drawings and other technical documentation will be in Chinese. Power Stations are strategic installations, which our own engineers must master very well, but knowing the Chinese, almost all works will be executed by their own people (even labourers), and project meetings will take place in Chinese…Let’s rethink before the…

  41. vote

    This is very good news for Zambia as it will create a lot of direct and indirect jobs. Direct jobs as a result ofconstructing the dam and skilled and unskilled job opportunities in the hydro-electric power industry. Indirect jobs will also be created by small and medium enterprise in the supply chain. Although in my opinion building a dam on a completely different river would have spread the country’s industrial and economic development to other areas. Eg building the dam on Luapula River.

  42. vote

    #44 you sound as if you are someone who has no electricity and has never seen the benefits of electricity, otherwise you would have experienced blackouts and you would not pass statements like that. Playing with the country’s economic security and development by politicising simple and straight forward issues will only take us backward. I for one want electricity whether it is Chinese electricity, German, Swedish or whatever, I do not want load shedding. If you do not want the project go find yourself some remote corner in Zambia where you can live alone in darkness, I am sure your wife and children would not want to associate with backward politics like yours Mr poor one ngwee.

  43. vote

    Achimwene just concede that your option of energy source is not only feasible in Zed but also uneconomical.

  44. vote

    This sounds like a good deal, would be good for LT to provide more details and, for once, some sound financial analysis. For those who always have something to say against anything Chinese, it would not hurt to do some minimal research on the contribution these people have made to Zambia over the years. Andrew Sardanis has made a start for you in his book, Africa – Another Side of the Coin, if you cannot find other sources. Secondly, to those who advocate Nuclear Power, Gas and all manner of alternatives, I am sure if you write a sound arguement, LT will publish it and the Government will listen, as will all the other potential investors who have so obviously not realised that your viable and all so profitable and economical alternatives exist.

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