Zambia, Zimbabwe Pin Energy Hope on Batoka

Lusaka –
Zambia and Zimbabwe are set to finalise initial plans to boost electricity generation capacity soon.
This, in a bid to meet the growing energy needs for the local consumer base and foreign contractual obligations of the two countries.
With an output capacity of 1 800 megawatts daily, Zambia has been struggling to meet local energy needs and foreign contractual obligations.
Zimbabwe equally falls short of meeting consumer demand because of ageing facilities.
Against this backdrop, the two countries, who will jointly finance the Batoka Hydro-electric Project – with additional funding from donors, seek to ensure construction and commissioning of the project is complete by 2017.
The Batoka project has capacity to generate 1 600Mw.
According to Zambia Electricity Supply Corporation (ZESCO), plans for the construction of the much-longed for hydro power plant on the banks of the Zambezi River ‑ which separates the two neighbours ‑ are at an advanced stage with feasibility studies to commence soon.
The two neighbours have ordered fresh environmental impact assessment studies before the actual construction begins, says Zambia’s power utility Managing Director, Cyprian Chitundu.
Twenty years ago, the Zambezi River Authority (ZRA) ‑ jointly owned by Zimbabwe and Zambia ‑ undertook feasibility studies and costing for the project. But fresh feasibility and EIA studies to determine actual works and financing costs for the project have been ordered due to the lapse of time.
Tenders have been invited for the review of the feasibility study of the project, Chitundu told The Southern Times this last week.
“An expression of interest was tendered in the press to look for consultants to review the study that was conducted in 1992. We need to ensure that the feasibility study is brought to speed,” he said.
A committee consisting of ZESCO, Zimbabwe Electricity Supply Authority (ZESA), and the ministries of energy and finance from both countries, is in place to devise modalities on the project and estimate how much would be required to develop the hydro plant.
ZRA has also been tasked to co-ordinate the construction of the dam, lying on the banks of the Victoria Falls.
The project is expected to meet the ever-rising demand for power, as economic activities in the two countries increase.
The new project, in addition to others both countries are undertaking, will help the two countries meet power demand, as their economies continue to grow at an average seven to eight percent.
Zambia, where many foreign investors are seeking sanctuary, needs to grow its energy generation capacity to avoid falling into energy deficit again, through the construction of new projects and rehabilitation of existing ones.
“This is the best time to invest in power projects, not in 10 years’ time, because building power stations after 10 years will be very expensive.”
In Zambia, the power company has intensified its initiative to invest in capital projects and increase power distribution, generation and transmission to reduce power outages.
This had earlier prompted the power company to request mining companies to reduce power consumption by 100 megawatts of the 40 percent they consume.
Of the 1 400 megawatts ZESCO produces daily, mining companies, through the Copperbelt Energy Corporation, buy an average 530 megawatts to meet their demand.
At peak period, ZESCO produces 1 800 megawatts daily, despite the more than 6 000 megawatts available energy capacity which remains unexploited amid vast rivers and lakes to propel hydro energy for lack of investment.
The continued power expansion in various parts of the country has helped reduce, in a way, power outages in recent months.
Kariba North bank expansion has also helped reduce the power deficit to 70 megawatts (Mw) from 250Mw.
Kafue lower, Kafue Gorge, Lunzua and Batoka hydro power projects are among other projects, which, when completed, would increase power generation capacity.
Nearly US$5 billion will be spent over the next five years to address the energy problems Zambia has been facing over the years.
Reiterating the two countries’ commitment to kick-start the financing needs for the Batoka Project, Chitundu said other options are on the table, including bringing on board various stakeholders to fund the project.
Recently, a group of financiers, among them Africa Development Bank, sought to raise more than US$230 million to invest in energy supply in the Southern African region, chiefly for the development of interconnectors.
Zimbabwe, Zambia, Botswana and Namibia operate the ZiZaBoNa interconnector that helps the foursome trade power among themselves in case of a deficit, as the problems persist in the region. This has prompted the Southern African Power Pool (SAPP) to direct all 14 SADC member states to take off their “sleeping energy” projects to add to the regional energy capacity. As at end of 2011, the SADC member states realised more than US$1.5 million through power trade among themselves.
Meanwhile, ZESCO is seeking to raise capital for its various projects on the local bourse to broaden its capitalisation capacity after getting government nod to list on the Lusaka Stock Exchange (LuSE).
Earlier, ZESCO was reluctant to offload shares on the capital market without government endorsement.
“We are working on listing on the stock exchange,” the Minister of Finance said recently, “We need to list on LuSE, as this will help us raise funds for future investments.” He said the listing would empower the public to have a stake in ZESCO. Earlier Zambia’s Finance Minister Alexander Chikwanda urged all state-owned companies to maximise on the benefits of the local bourse, as an alternative avenue for raising funds rather than complaining about the high cost of borrowing.

January 2013
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