Business
Zambia to import power from Botswana
ZESCO has signed a deal with Australia’s African Energy Resources to transmit power to Southern Province from the Aussie firm’s coal-fueled station in Botswana. The memorandum of understanding (MoU) was signed for the importation of 300 megawatts of base load electricity power from the Sese Coal and Power project in Botswana.
The Australian-based exploration company will undertake a desktop study to evaluate preferred options for the transmission and integration of power supply from Sese into Southern Province. The report says preliminary studies have confirmed that there are no material flaws in the transmission options under evaluation.
According to information posted on Proactive Investors Australia website the agreement is non-binding at this stage with Zeasco and Maysen and Borowski Investments, an Australian corporate advisory firm. “Zesco will provide access to its technical capability and information to assist with the study, and Maysen and Borowski will assist African Energy Resources Limited and Zesco in meeting key objectives,” the report says.
The parties have agreed to explore the potential for the delivery of 300MW of base-load electrical power from African Energy Resources’s Sese Coal and Power project into Zesco’s grid, 500 kilometres to the north. African Energy Resources’ shares may trade firmer after signing [this] agreement,” it says.
The report says Zambia is currently experiencing a period of strong economic growth centred on new mine and smelter developments in Copperbelt Province. It says with the expansion of several existing large-scale mines, there is a substantial increase in demand for power.
Meanwile, ZESCO says works for the US$2billion Kafue Gorge lower is progressing well and the company to undertake the construction will be hired soon. Zesco acting chief operations officer Christopher Mubemba said tender documents for the five shortlisted constructors will be issued soon while securing finances for the project will follow later in the year.
Mr Mubemba said this in Livingstone at the just-ended Engineering Institute of Zambia gala dinner. The Kafue Gorge lower is one of the Zesco’s major projects with a capacity of 750 megawatts (MW) and will cost an estimated US$2 billion while construction will take six years. Mubemba also advised, “In terms of financing, US$1.5 billion is a loan and US$500 million is equity. We have had a lot of support from Government. From the US$750 million Eurobond, Zesco was allocated US$186 million.”
Mr Mubemba said there is need to invest in electricity to sustain Zambia’s economic growth, adding that power is the key to industrial development of an economy. He then went on to say, “The biggest challenge we face is dealing with the peak period when the company faces a deficit of 200 to 300MW per day.”
He said the US$320 million power rehabilitation project (PRP) embarked by the company has helped with rehabilitation of generation, transmission and distribution infrastructure to stimulate the growth of the country. He cited the upgrading of Kafue Gorge station to 990MW from 900, Kariba station to 720MW from 600MW as one of the major achievements of the PRP.
The rehabilitation of Victoria Falls hydro-electricity power station in Livingstone attracted US$53 million, Kafue Gorge (US$85 million) and Kariba (US$81 million). Mr Mubemba said works at Kariba North Bank extension, which has attracted US$420 million, is almost finished and a second machine will be commissioned next month.
Commenting on the US$232 million Itezhi-tezhi project, Mr Mubemba said the company has had problem with raising funding but on Tuesday last week, a final agreement was signed with investment partners. He also pointed out that, “Despite the fact that financing arrangements were not put in place, Zesco was innovative and looked for money from other sources; we borrowed from Government and also used our own balance sheet….As I speak the work is 48 percent complete despite financing been finalized last week.” The 120MW Itezhi-tezhi project is due for completion next year.
Source: Lusaka Times