By Jeff Kapembwa
Lusaka – Zambia has mooted an ambitious energy and economic development programme in which several energy projects to raise production of refined petroleum products, increase power output and meet the increasing demand for various consumers will be undertaken, as the country seeks to become a Southern African regional power hub.
Presently, Zambia is in talks with Saudi Arabia to finalise a contract for the Middle Eastern Country to provide US$20 million worth of crude oil and save the cost of importing refined petroleum products from the Middle East.
Zambia is expected to start benefiting from the arrangement as soon as the ‘letter of credit’ is ready.
“It’s a done deal,” David Mabumba, the energy minister says, adding that “All we are waiting for is a letter of credit from the ministry of finance and then we shall hit the ground running.”
Zambia has over the years incurred debt in excess of US$100,000 for every 90,000 tonnes of crude oil imported from the Middle East because of various agents.
Should the deal with the Saudi Arabia materalise, Zambia will be petroleum self-reliant if the agreement remains sustainable over a long term.
The country is seeking to raise the level of power generation up to 1,400 megawatts by 2020 to meet the increasing demand for domestic and export markets. This comes after setting in motion various energy generation projects.
Energy permanent secretary Emelda Chola earlier told delegates at a Rural Electrification Authority conference in Lusaka that it was the country’s plan to add 2,000 megawatts to the power grid.
If the two intentions succeed, it would entail Zambia having a total generation output of over 4,500 megawatts.
Zambia and Zimbabwe are collaborating to develop the US$6 billion, 2,500-megawatt Batoka Gorge Hydro-Electric Power Project. The project is expected to go online by 2024. The country is working on another joint power project with the Democratic Republic of Congo – the Luapula River Hydro Plant on the lower Zambezi River.
When completed, all these projects would assist the country overcome power deficits suffered over 38 years, when it struggled to meet it energy needs, Mabumba said.
This power deficit was on account of government failing to recapitalise the energy sector over three decades, resulting in ageing equipment, which could not be competitive, leading to blackouts.
The country’s power utility, Zesco, has this year shifted its power generation focus to hydro power. This is because of adequate water resources in the country’s main reservoirs, the Kariba Dam, Kafue Gorge and Lake Kariba all having water levels above 50 percent compared to 30 percent during the same period last year, said Henry Kapata, the company spokesperson.
Meanwhile, Zambia seeks an equity partner to revitalise operations at Indeni Oil Refinery and Tanzania Zambia Mafuta (TAZAMA) pipelines, with an estimated injection of over US$1 billion.
Operations at the 36-year-old Indeni Oil Refinery have been significantly reduced and the refinery would require a capital injection of over US$800 million.