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Zambia seeks USD 7 billion to boost its energy sector

Steel News - Published on Sat, 17 Jul 2010

Zambia seeks USD 7 billion to boost its energy sector and provide electricity to meet demand in the Southern African nation chiefly from the mines.

Mr Mwendoi Akakandelwa energy deputy minister of Zambia said that the development of the country’s hydro power potential would result in the addition of 2,910.83 MW of the hydropower produced to meet demand from various consumers including the copper and other mineral producing mining sector.

Mr Akakandelwa said while speaking during the presentation of the final report of the country’s national investment review process for water for agriculture and energy that the country further needs USD 820 million for water development to boost agriculture production. Such estimated investment levels would result in more than double of the country’s agriculture potential.

According to Mr Akakandelwa, Zambia, Africa’s largest copper producer’s total investment cost required for hydropower development currently stands at USD 6,896.6 million. The cost would be higher given that small or mini hydropower stations were yet to be costed after completion of the feasibility studies. He said that failure to fully exploit the hydro power potential had resulted in limited coverage for electricity for industry and agriculture.

Mr Akakandelwa noted that potential for hydro power in Zambia was immense and called for immediate exploitation before the country lost its comparative advantage to other countries in the process of developing their hydro power potential.

And Zambia is expected to start financial negotiations for the construction and commissioning of the 600 MW Kafue Gorge lower before the end of this year.

Mr Situmbeko Musokotwane finance and national planning minister of Zambia said that progress on development of electricity generation projects across the country is on course. The government will continue in 2010 with preparatory work for eventual development of the 600 MW KGL and the 120 MW Itezhi tezhi projects which are likely to be completed by 2017.

He said that both of these projects will also require contraction of non-concessional financing, while remaining consistent with the non concessional debt ceiling under the program. Financial negotiations for the KGL project are expected to commence in 2010.

He added that work will continue on the Kariba North Bank extension project in 2010 which will add 360 MW of additional capacity by 2013. Part of the work for this project was financed by contracting USD 315.6 million non concessional financing in 2009. Government remains strongly committed to addressing constraints in electricity generation.

Mr Musokotwane said that a multi year tariff framework was announced to raise electricity tariffs to cost recovery levels by 2011 saying an indicative increase of 26% was announced for 2010.

He said that after statutory public consultations, the ERB will announce the exact percentage of the next increase. Government is committed to meeting the related structural benchmark for end June 2010. He said that we also intend to modify the regulatory process to allow for implementation of phased multi stage tariff adjustments, as a way to streamline the process.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)

Posted By : admin on Sat, 17 Jul 2010
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