- Title: ZAMBIA: Zambia signs Chinese deal to boost electricity supply
- Date: 23rd November 2007
- Summary: (AD1) KARIBA, ZAMBIA (NOVEMBER 20, 2007) (REUTERS) WOMAN ALONG THE DAM'S WALLS DAM WALLS WATER FROM DAM AND HILLS
- Embargoed: 8th December 2007 12:00
- Location: Zambia
- Country: Zambia
- Topics: Energy
- Reuters ID: LVAD7T11RITEEEKIF19E6JXXRFYW
- Story Text: Zambia has signed on a Chinese firm to expand facilities at it's main power station. The mineral rich country recently faced a surge in demand for electricity after new copper and cobalt mines opened up leading to power rationing in the domestic sector.
China's Sinohydro Corporation is due to start the expansion of Zambia's Kariba North Bank power station by 360 megawatts (MW) early next year, in a bid to meet growing demand from the country's copper mines, officials said on Monday (November 19).
State utility Zesco Ltd has said Zambia had a deficit of up to 250 megawatts and has started rationing electricity to domestic and other commercial users to ensure adequate supply to the mines, which include copper and cobalt operations.
At a signing ceremony between Zesco and Sinohydro on Monday, Zesco's Managing Director, Rhonie Sisala said the Export and Import Bank of China had agreed to provide 85 percent of the total project cost of 243 million US dollars for the expansion, and the balance would be sourced from other financial institutions.
Sisala said the hydro-powered Kariba North Bank power station on the Zambezi river at Kariba dam, about 225 kilometres south of Lusaka, has an installed capacity to generate 600 Megawatts, which is already being upgraded to 720 Megawatts under Zesco's Power Rehabilitation Project.
"The new plant will have a capacity of 360 megawatts and it will be an under-ground plant. After the completion of this work, the total capacity of Kariba north bank will increase from the current 600 megawatts to 1080 megawatts," he said.
Sisala said that Zesco had engaged a consortium of advisors including Fieldstone, Development Bank of Southern Africa and Le Boeuf Lamb & McRae to help negotiate for the remaining 15 percent of the financing of the project, which is expected to be completed by December 2011.
Zesco signed an agreement with Sinohydro for the project in 2003 and afterwards a full feasibility study, including geological investigations at the proposed site was carried out in 2005.
Spurred by the opening of new copper mines and upgrading of others, demand for power in Zambia has lately risen and most residential areas have been experiencing daily power cuts when demand reaches the peak.
Zambia is not alone in facing a worsening energy crunch. Industry experts have projected a major power deficit across southern Africa starting in 2008 due to rising industrial development and lack of fresh investment in power generation.
"Studies by the southern African power pool have shown that due to high economic growth taking place in the region, the demand in the region will exceed the installed capacity from the year 2008. This, therefore, means that unless our country takes deliberate steps to develop new power generation sources, it will actually have few alternatives of importing power from the neighbouring countries as most of the countries in the region will face a similar power deficit situation," said Zambian Energy and Water Resources Minister, Kenneth Konga.
The current Zesco installed capacity is about 1,631 megawatts against a total demand of about 1,200 megawatts. This gives Zesco a surplus capacity of 431 megawatts, some of which can be exported within the region.
But obsolete equipment and lack of new investment in power generation since Zambia's independence from Britain in 1964 are among the factors hampering Zesco's efforts to meet full power capacity of 1,631 megawatts, said officials. Song Dongshen, Sinohydro's Deputy Managing Director says that things are about to change.
"We are sure we can complete the project in short time, short than 48 months and with good quality," he said.
Zesco has been meeting the shortfall by importing power from neighbouring Democratic Republic of Congo (DRC) and South Africa.
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