Energy
users across Zambia and Southern Africa will benefit from a new 120 MW
hydropower plant and long-distance transmission line to be financed with
support from Europe’s long-term lending institution. The European Investment
Bank will provide EUR 50m for the project that includes the construction of a
hydropower plant at the existing Itezhi-Tezhi Dam and 291km transmission line
to Lusaka that will connect the power station to the national grid and the
Southern African Power Pool.
The
funding agreement finalising European Investment Bank support for the ZESCO
project was formally signed in Lusaka by Zambian Minister of Finance, Alexander
Chikwanda, Managing Director of ZESCO Cyprian Chitundu and representatives of
the European Investment Bank.
“Increased
production of green energy will lower the cost of importing electricity to
Zambia and reduce reliance on coal-generated power. The European Investment
Bank recognises the detrimental economic impact of power shortages in the
region and is committed to supporting long-term investment in key energy
infrastructure across Africa. The impressive Itezhi-Tezhi project complements
the European Investment Bank’s support for upgrading the Kafue Livingstone
transmission line provided earlier this year.” said Pim van Ballekom, European
Investment Bank Vice President responsible for lending in sub-Saharan Africa.
“The
Itezhi-Tezhi Hydropower Project will enhance the generation capacity of
electricity on the national grid, as well as increasing the reliability and
quality of supply of electricity in Zambia. The 120 Megawatt Project is
being developed by Itezhi-Tezhi Power Corporation, with ZESCO and TATA each
having a 50% share. Power from the Itezhi-Tezhi Power Station will be
transmitted through the Itezhi Tezhi –Mumbwa-Lusaka West transmission line to
the national grid. Evacuation of power through this line will significantly
reduce the challenges facing ZESCO and help to meeting enormous demand for
power arising from expansion of the customer base and growth in mining,
agriculture, commercial and domestic sectors”. said Cyprian Chitundu, Managing
Director of ZESCO.
“Support
for energy is a key focus of European engagement in Zambia. Investment to
improve energy infrastructure and increase supply is essential for economic
growth, job creation and reducing poverty. The EU Delegation in Lusaka is
committed to increasing its contribution to improving energy access as outlined
by the next European Development Fund EDF and working closely with the European
Investment Bank to ensure effective support for the sector” said Gilles Hervio,
Ambassador of the European Union to Zambia.
The
Itezhi-Tezhi hydropower project uses an existing dam on the Kafue river, which
will minimize the cost of the project and limit environmental impacts. This was
constructed in the early 1970s to regulate water flow for the Kafue Gorge Power
Station further downstream.
This is
one of a number of projects intended to increase hydropower generation for the
regional electricity network, the Southern African Power Pool, improve energy
connections between countries in the region, reduce Zambia’s power deficit and
reliance on imported electricity from coal-based power stations. Electricity
generation by ZESCO in Zambia is almost entirely based on hydropower plants on
the Zambezi and Kafue rivers.
Additional
financing for the USD 375m project will also be provided by the French
Development Agency (AFD), African Development Bank, FMO, PROPARCO, Development
Bank of Southern Africa, Republic of Zambia, TATA and the Government of India.
An interest rate subsidy and technical assistance grant will also be provided
by the EU-Africa Infrastructure Trust Fund. The project is expected to be
completed by 2015, provide significant employment during construction and
create 60 permanent jobs when complete.
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