CEC, AFC sign $1.2bn hydro-power project
COPPERBELT Energy Corporation Plc and the Africa Finance Corporation have signed a deal aimed at financing the construction of two hydro-power projects in Zambia.
Under the deal, the Africa Finance Corporation (AFC) will finance the construction of the Kabompo and the Luapula hydro-power project at a cost of about US $1.2 billion.
CEC chairperson Hanson Sindowe said projects that will be developed through the new partnership include the Kabompo Gorge Hydro Power Project in North-Western Zambia at a cost of US$150 million and the Luapula Hydro Schemes in Luapula Province at a cost of US$1 billion.
The agreement will also cover investment in other African countries.
“We are excited by AFC coming on board to work with us and about the deal because it is an opportunity for CEC to start growing, to grow not only in Zambia but in the region,” Sindowe said at the signing ceremony in Lusaka yesterday.
Sindowe said the construction of the two power projects is expected to ease electricity shortages in the country.
Electricity is a major issue in Zambia as the mining sector in Africa’s top copper producer is power hungry and growth over the next few years could be constrained by available supply.
State utility, Zesco, has resorted to rationing power to residents.
But CEC is confident that Zambia could have a power surplus of about 600 megawatts (MW) by 2016, a situation which should help ease the electricity deficit facing southern Africa.
It has noted that Zambia could get out of the deficit relatively quickly and become an exporter of power because its generation projects were far ahead of those in the rest of the region.
According Sindowe, output at the two projects was expected by 2015.
Earlier, AFC president and chief executive officer Andrew Alli urged Zambia to become a member of the AFC to access increased financing from the corporation.
And commerce minister Robert Sichinga assured AFC that the investment they were making in Zambia was protected.
Sichinga commended the two parties on the joint partnership.
“It is evident that the whole of Africa, and southern Africa in particular, is desperately short of industrial power…one cannot go wrong by investing in the energy industry, which has a supply deficit,” said Sichinga.
“It is my sincere hope that the deal we are witnessing today will translate into energy supply for Zambia and the region.”
AFC is a hybrid investment bank and multilateral development financial Institution established by treaty amongst sovereign states.
The Nigeria headquartered corporation has a paid-in capital in excess of US$1.1 billion and has a mandate to invest in infrastructure related projects throughout the African continent.
