The remaining construction works at the 2.3 billion dollars Kafue Gorge power project are being financed by Zesco and alternative funds after EXIM Bank of China froze funding to the Kafue Gorge Lower project, Energy Minister Peter Kapala has announced.
Mr. Kapala says Zesco is generating internal revenue to ensure that works at the 750 mega watts Kafue Gorge Lower project are completed early and all the turbines come online.
He said whereas government is not looking at asking Exim Bank to unfreeze funding to the project, negotiations with China to restructure and reschedule the Kafue Gorge Lower project debt are on course and there is goodwill from China who know that the new dawn government means business.
The Minister has however assured in a statement that the exporting of power will not lead to load-shedding as is being suggested in some quarters of society.
Below is the full statement
KAFUE GORGE LOWER TO BE COMPLETED IN NOVEMBER THROUGH ZESCO FINANCING
The remaining construction works at the $2.3 billion Kafue Gorge power project are being financed by ZESCO and alternative funds after EXIM Bank of China froze funding to the Kafue Gorge Lower project because the PF government defaulted on payments based on the loan agreement. ZESCO is generating internal revenue to ensure that works at the 750 mega watts Kafue Gorge Lower project are completed early and all the turbines come online.
Whereas we are not looking at asking Exim Bank to unfreeze funding to the project, negotiations with China to restructure and reschedule the Kafue Gorge Lower project debt are on course. There is goodwill from China. China knows that the New Dawn Government means business and that we shall abide by the contracts and agreements we have with them.
The Kafue Gorge Lower Power plant was designed to have 5 turbines, each producing 150MW. At least two of the five turbines have been fully installed. In fact, in April 2022, ZESCO indicated that two machines at Kafue Gorge were operational and were producing 300 megawatts while a third one was undergoing a reliability test. They also revealed that the fourth turbine was also earmarked for commissioning soon as final works were ongoing.
We anticipate that the project, which has seen the employment of over 4000 Zambians, who worked alongside more than Chinese workers, will be completed this November. Once completed and at full production, Kafue Gorge Lower will ensure that Zambia becomes a net exporter of electricity. Zambia will be able to sell electricity to our neighbours at good tariffs, which will be able to pay outstanding debt.
This bodes well with new developments that have seen electricity being the highest non-Agro export for Zambia for March 2022, with exports of K300 million (about $18 million) in March 2022 alone. This was before ZESCO and Namibia’s Nampower, in April 2022, signed a power supply agreement for the export of an additional 80 MW in addition to 100 MW that was already being exported after the first agreement was signed in 2020.
The demand for Zambian power is not just from Namibia. The Zimbabwe Electricity Supply Authority (ZESA) was recently quoted in that country’s media as saying that it was in negotiations with ZESCO over the latter exporting 100 MW to Zimbabwe. The negotiations were premised on Zimbabwe making pre-payments for the 100 MW which will come from Kafue Gorge Lower. The condition precedent is that ZESA has to pay monthly deposits of USD 6.3 million to enjoy the facility.
While copper remains the highest export earner, there are limited resultant dollars being remitted back into the country due to the nature of mine ownerships and copper trading. However, export earnings from electricity can have a better impact on the economy, including the strengthening of the Kwacha. This is because ZESCO is wholly owned by the people of Zambia and the company’s foreign earnings will flow back into the country.
Let me end by saying that exporting of power will not lead to load-shedding as suggested by some people. Kafue Gorge Lower will ensure excess power even though we are likely to see Kariba North Bank Power Station operating at about 3m below the level of last year at this time due to poor rainfall patterns this year.
Hon. Eng. Peter Chibwe Kapala
Minister of Energy
01. 06. 2022
This stinks of corruption. There is Lusambo’s source of income which was frozen due to corrupt activities. We need an audit done ASAP. How much of the 2.3 billion is outstanding? why didn’t ZESCO foot the bill in the first place instead of expensive borrowing?
The Pay Foward Party of Lazy Lungu…this translates to higher tariffs because PF ate the funds.
Deja Vu & Co remember this statement when your electricity is increased.
But ZESCO is already broke, how are they going to finance this when the cost of generating electricity is greater than what the market price is? Not to mention the unfair CEC agreement seems to have been secretly signed with no mention of what terms have been agreed. Givin the infrastructure Ministers financial interest in this company the terms must clearly disadvantage ZESCO. Lies in the Morning, lies in the afternoon and lies at night.
But ZESCO is already broke, how are they going to finance this when the cost of generating electricity is greater than what the market price is? Not to mention the unfair CEC agreement seems to have been secretly signed with no mention of what terms have been agreed. Givin the infrastructure Ministers financial interest in this company the terms must clearly disadvantage ZESCO. Just let the Chinese finish the project. Zambians are fed up of excuses Lies in the Morning, lies in the afternoon and lies at night.
Half-baked story as usual. You need to dig and give us more. Why has EXIM Bank of China frozen funding to the project? You dont answer or show us your attempt at getting information relevant to the question. Your story only relies on the minister’s press release. What a lazy bunch you are!
ZESCO IS BROKE AND NOW ???
These journalists do not follow up a story, zero. They wait to report what others have heard. Indeed half baked news. Why did The Exim Bank of China freeze the funding? That’s the untold story.
Thank you Edgar China Lungu for another project failing because of your CORRUPTION!
And he is STILL not in jail???
The project was on course up until PF lost elections. The project suffered uncertainty until the wise intervention of the current President.
To all PF cadres: Why do you all want the reporter to explain why EXIM Bank stopped funding the project? The reporters should instd be asking you PF cadres why EXIM Bank stopped funding cos all of you PF cadres where beneficiaries of Zesco on payrols when you know you where not employed by ZESCO. So dont try come be clever here. You Baboons know the reason why, more than this reporter. PF was directly funded by first & foremost ZESCO then DMMU. As you can see now when PF cadres are gone Zesco is even able to start funding its own projects-for the first time in 12years.
Then fome dullards start making noise when they hear HEHH engaging with the Chinese only now………..ati he needs china after all…….
No……..because of lungus corruption and ineptitude, China stopped borrowing money to zambia , hence the engagement with the west………..
Why did the Chinese feel compelled to freeze the funds..not looking good – something fishy going on!!
#plant s tree please.
In January Former ZESCO board chairperson Mbita Chitala was urged to report the alleged incidences of corruption highlighted in his latest book to investigative wings.
In his book entitled “Corporate Capture, the Political Economy of Electricity Management in Zambia 2014-2021”, (How Not to Manage a State Enterprise), Dr. Chitala has made numerous allegations of corruption in the energy sector involving former Patriotic Front government officials.
University of Zambia Historian Professor Bizeck Phiri is appealing to Dr. Chitala to report those he has mentioned of being involved in corrupt activities to relevant authorities if he has evidence.
Prof. Phiri said this will help the institutions such as the Police, Drug Enforcement Commission, and the Anti-Corruption Commission to be able…
We made mistake to rush to the west for help and dump China. Maybe USA will pay for us. However, HH is wise, he made a call to Chinese president and asked for help. Maybe Biden did not answer. Europe will come to our needs after building Ukraine
Lazy Lungu and his minions messed up the deal.
The chinese funded pf and had deals with ECL lusambo etc while the westfunded hh..so why continue funding a west aligned government when america is busy and stupidly arming Taiwan and meddling in the one china policy. Isn’t that simple!!!
All You fliping praise singers together with Your Demi God should just swallow Your nonsense Pride and engage China…China eyabako..You still need them for Your IMF deal remember ..Ba Kabwa ime.
Whatever: Zesco surely doesn’t have the money
The problem in Zambia is we love ubufi..The truth of the matter is that the new yarn government chased them like dogs….and went to the West thinking they will help Zambia, those are hard core criminals destroyed Iraqi,Libya China money is investment money therefore you can development and grow the nation, Western money is donor aid money extremely dangerous it has conditions attached to it no wonder we are seeing LGBTQ flags someone must have given them a green light.. Shameful we may not know or see what really happened..but Jehovah God knows and time will tell.
Chi mutaware shut up of you have no knowledge on a topic. The bloggers are asking the journalists to do their duty. It’s got nothing to do with the UPND PF rivalry. In professional journalism the publisher has the duty to explain why has EXIM Bank of China frozen funding to the project. Go read the diggers website and see what we are talking about
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