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Saturday, December 3, 2022

Government , EIB ink $30 million power deal

Economy Government , EIB ink $30 million power deal

THE Zambian Government has signed a US$30 million finance contract with the European Investment Bank (EIB) for upgrading of the Kafue-Livingstone electricity power transmission line.

The contract which was signed in Lusaka yesterday by Finance and National Planning Minister Alexander Chikwanda and EIB director Patrick Walsh would enable the EIB to provide a loan amount of Euro 22.0 million or approximately $30.0 million towards the financing of the project.

Mr Chikwanda said the signing occasion would go beyond symbolic significance because electricity was central to the entire development process embracing all sectors of the economy ranging from agriculture to mining and manufacturing.

He said the project would improve the reliability of Zesco’s regional power trade transmission network infrastructure along the Kafue-Victoria Falls Corridor in Southern Province.

He said once completed, the project was expected to upgrade from the existing 220 kilo volts (kV) to 330kV which would in turn increase Zesco’s power transfer capacity to satisfy the potential demand of electricity within Zambia and the neighbouring countries.

Mr Chikwanda said the Zambian Government was faced with huge infrastructure needs which required significant financial resources especially in the transport and energy sectors that were strategic to achieving sustained economic growth.

He, however, said the Government was partnering with the private sector through the Public Private Partnership (PPP) arrangement to address the challenge.

He said the Government appreciated the resulting cooperation which he said had high prospects to enhance its benefits from the bank.

EIB vice-president Plutarchos Sakellaris said the project would improve regional energy distribution and double electricity transmission capacity between the Victoria Falls hydro-power station and Lusaka.

Mr Sakellaris said upgrading the Kafue – Livingstone transmission line would assist the Government’s efforts in ensuring that a reliable supply of energy could keep pace with economic growth in Zambia and improve electricity distribution across southern Africa.

He said the EIB was committed to supporting the Zambian energy sector and contributing to global goals highlighted by the 2012 International Year of Sustainable Energy for All.

Head of the delegation of the European Union to Zambia and COMESA, Ambassador Gilles Hervio said access to energy was crucial for the development of Zambia.

Mr Hervio said that energy was important for the delivery of health services, education, food security, business activities, and economic development in general.

Zesco managing director Cyprian Chitundu said that the upgrading of the transmission line project would provide extra power to the Southern and Western provinces of Zambia and other countries in the Southern Africa Power Pool.

He said that the energy improvement scheme would include construction of new substations replacement of energy infrastructure over 50 years old.

The project is expected to be completed by the end of 2014 and would create significant technical employment during the upgrade.

The original line was built in the 1970s to allow easy and cost-efficient upgrading when necessary.

The transmission line would be supported by the EU-Africa Infrastructure Trust Fund through a total grant of Euro 5.55 million split in two different components which included a Euro5.2 million interest rate subsidy and a Technical Assistance Grant of Euro 350,000 to support procurement and monitoring.

The total project cost is estimated at $100 million and would be co-financed by the EIB, the World Bank and by the project promoter, Zesco.

[Times of Zambia]

27 COMMENTS

  1. Good but you should enlighten us how much we shall pay back..You singed for $30million and the total project will cost $100million to be footed by EIB, the World Bank and Zesco.

  2. PF government’s only job is to sign loans….  Chikwanda was in government when Zambia ended up with a US$7bn debt

    • engineer and your fellow MMD cadres havent you gotten over the loss?which country in this world doesnt sign loans?isnt this project important?you are really an engineer for monkeys.

    • @2 Engineer, off all people you should know how costly and capital intensive such engineering projects are…and how it can repay for itself if well managed. At the moment its only the Chinese, the Russians and the oil countries in the Mid-East have the money to finance such projects without borrowing. This loan is a good one…not the donor funds that go into making boreholes calling that development.

    • Don’t mind this one, just a loud gong, an eun*ch who has nothing to offer but empty laughter, what Engineer wouldn’t want to offer a contribution to such a subject. 

  3. The new constitution should include a debt ceiling clause to regulate the amount of debt government can contract. 

    • What we need are well thought out real development projects that can pay for themselves once achieved. You once posted an idea of how to develop Livingstone into a world tourist attraction which I thought was very grand…same like the coming into being of Las Vegas…and I thought if only this can be well packaged and sold to venture capitalists world over it can work.

      There should never be ceiling on the debt a country must take for it to develop….just well planned projects!

  4. This inking by the gvmnt is threatening,much as we want development,lets try not to get our future generations into debts whose value they will not enjoy,be careful when inking these loans bwana minister.

  5. I don’t see anything wrong with this Loan Mr Engineer. However I will take your second comment seriously on debt ceiling and probably be able to submit to the technical committee on the constitution making. Thanks for noting that. But also stop the habit of coming under different names: Zamcab, The Enginner and Exhaust Blown Diffuser! You can only be one person!

  6. Lol @ #5 am Zamcab trust me,the engineer and i have very different views on many issues.There can only be one Zamcab and that is me.Am not fake bro.

  7. Chitundu, if its PPP it means Public-Private partnerships; so we, the “public” would like to know the fine details of (i) period of concessions; (ii) payback rates; (iii) agreements on maintenance for the whole life of the facilities, especially at the end of the concession period. Some PPP projects pay very well such that they can break-even in a very short period; E.G. M6 Toll – Birmingham (Midland lands, UK). This is the only way you will avoid useless concessions such as the KK International Airport awarded to a Turkish Company for 50 years; ooh yeah, 50 fkn years bane!! And that was a government “working for you”. How foolish can a nation and its leader be?

  8. @ Exhaust and Zamcab, if you are not the one then I seek your forgiveness. I may have judged you guys hastily. 

  9. Is this a Zeco loan or government loan? In whose books does the loan go? Zesco or government? Is the transmission line owned by Zesco or government? Someone enlighten me please.

  10. Lundazi dweller I think the government just facilitates these loans.The people pay the loan through zesco.It does not matter in whose books the loan is recorded.

  11. I see electricity generation as the oil for Zambia. It’s the alternate to copper. Our country is endowed with the natural resources (and well placed geographically) for it to be the number one producer and exporter of this commodity. Our neighbors’ demand for the commodity is insatiable. Russia incurred a huge debt for it to construct delivery pipes of natural gas to Europe. Today, Russia is debt free. Investing in power generation is the smartest route to take.

  12. @RYCUS
    Well said.  Unfortunately the kaponyas who rule Zambia don’t have any such vision.  No progress has been made to get Kafue Lower on track to production and I doubt this will happen over the next 5 years as the Chinese who were going to fund it have been berated by PF for a long time.  Zambia will continue getting dribs and drabs from western institutions but this type of loan is not a game changer.  Power stations require billions of dollars to bring on-stream and no such money will come from western institutions.

  13. What a life it does matter in whose books the loan is recorded. The loan sitting on Zesco’s books means they are directly responsible for paying back the loan. Down the line Zesco will increase the tariffs in order to pay back these loans.

  14. All these contracts are music to people’s ears in Zambia, but let’s not forget that Euroland is in turmoil at the moment…with all these spending cuts and bail outs around in the EU, when a bank calling itself “European anything” comes along and agrees to offer its assistance, in fact its NOT assistance BUT business , I would be a bit wary and would be more interested in reading the small print than looking at the photos, more interested in the credit charge or the Annual Percentage Rate (APR) for this loan. 

  15. Our media should enquire for these figures as it’s us and our grand children who will be paying for these loans when these politicians are long gone. Most of these politicians of yesterday are keen to make political decisions over financial decisions all in name of a photo opp.
     In England or France if the Gov’t leans money out to the ECB to bail out some country or bank..its citizens are more interested in the lending rates and for how long (what’s in it for them), and its politicians have to justify that it’s a good deal… time to WAKE UP people you should see the lending rates these people lend each other here 2-3 %APR and the rates the lend developing nations in Africa.

  16. Rycus, I am glad you can acknowledge that, ZESCO alone has the capacity to increase our GDP by 90% and not just from new power plants but by building amplifier sub-stations every 50 kilometers or so. In electricity, power (P) is directly proportional to voltage (E) and amps (I) as in P=I*E. Thus an increase in either corresponds to an increase in power output. Now couple that with new power generation stations, you have a single country with our potential electrify not only the entire continent of Africa but Europe and the entire Middle East as well. Imagine the kind of revenue ZESCO would bring into our GDP with that kind of market potential. We just need more thinking outside the box and we can make it happen.

  17. Dear Ladies and Gentlemen,
    Thank you all for your comments.They mean we are very much concerned about our welfare.
    I just want to let you know that we have anew technology to produce power upto 100 000 Megawatt and was patented and the government knows about it but do not want to act on it but punish the citizens.If you have never known of this ,please write to me on my email adress and I will answer.The government needs to respond to this and Zambia will be the power house for the whole continent.

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