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]