8 September 2012

Zambia: World Bank, State Seals U.S.$56 Million Power Deal

Government and the World Bank have signed a financing agreement amounting to more than US$56 million which will help reduce the incidences of power shortages once implemented.

Finance Minister, Alexander Chikwanda, who signed the agreement for Zesco to implement the project within two years, said the deal would provide relief to the power transfer bottlenecks on the line and improve the reliability of Zesco's regional power trade transmission network infrastructure.

The financing agreement is for the Kafue-Muzuma-Victoria Falls Power Transmission Line Reinforcement Project worth $56.5 million to upgrade the Kafue West-Muzuma-Livingstone 220kv transmission line to 330kv and connect to a new 330/220kv substation in Livingstone.

The project, which is expected to help in filling the gaps in the power requirements, is further expected to provide a linkage between Kafue West with the Kariba North Bank Extention 330kv transmission line.

Mr Chikwanda said at a signing ceremony yesterday at his office that the project would form a vital part of the planned regional interconnection among Zambia, Zimbabwe, Botswana and Namibia.

He said the Government had prioritised infrastructure development in the energy sector to support economic growth and development.

Mr Chikwanda said there was growth in demand for electricity which had outstripped supply as evidenced by the increased load shedding.

"The growth in demand for electricity has outstripped supply as evidenced by increased load shedding. Access to electricity has remained low at 21.9 per cent of households at national level and only 4.5 per cent in rural areas," Mr Chikwanda said.

He said in order to curb the problem of load shedding, Zesco was currently implementing a power sector plan which included substantial capital expenditures for investments in new generation and transmission projects.

The minister said a viable energy sector was critical to achieving sustainable economic growth and development in the country as it was a crucial input in all sectors of the economy.

Mr Chikwanda said the main projects expected to add to the installed capacity include the Kariba North Bank Extension Project (360Mw), Maamba Thermal Plant (600Mw), Lunzua (50Mw), and Lusiwasi (84.4Mw).

The further construction of Kafue Gorge Lower (750Mw) and Itezhi-Tezhi (150Mw) would be carried forward.

Mr Chikwanda assured the World Bank that the funds would be used for the intended purpose so as to contribute not only to increased electricity supply but also to improved quality of life for the people.

World Bank Country Director for Zambia, Zimbabwe and Malawi, Kundhavi Kadiresan said Zambia had great potential to further develop the resource-rich economy through infrastructure improvements, especially in the energy sector.

She said the Government had taken significant actions to improve the performance of the sector and the national utility of Zesco.

She further said the project was a good example of close collaboration between her office and Government in the energy sector.

Zesco Managing Director, Cyprian Chitundu and Ms Kadiresan signed a project agreement at the same ceremony.

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