Nigerian bank to fund Zambia’s $1bn power projects

A Nigerian investment bank will partner Zambia’s largest distributor of power in the financing and development of six new hydroelectric power stations worth over $1bn in Zambia, an industry official has said.

The Managing Director for corporate development at Zambia’s Copperbelt Energy Corporation, Mr. Michael Tarney, told Reuters on Thursday that the six projects had a total capacity of more than 800 megawatts.

Tarney was speaking after the signing of an agreement for the joint development of power projects by CEC and the Nigerian company.

“We are immediately looking at the $150m Kabompo gorge hydro power project in north-western Zambia and five Luapula river projects estimated to cost $1bn,” he said.

The Kabompo project was moving well with financial close expected to be reached this year, he said.

“The Luapula projects have a combined capacity of 800 MW and this year, we are doing feasibility studies but I think we should be starting construction maybe 2013-2014,” he said.

The relationship with Africa Finance Corporation should boost CEC’s chances of winning the bid for units of a Nigerian state power company lined up for privatisation, Tarney said.

Africa’s most populous nation of more than 140 million is the continent’s biggest oil and gas producer but is blighted by persistent electricity outages.

It plans a multi-billion dollar privatisation of its power sector to improve efficiency and had split the distribution network of Power Holding Company of Nigeria into 11 different units valued at about $100m each.

“The relationship with Africa Finance Corporation whose shareholders include the Nigerian government means we have a local partner,” he said.

The Chief Executive Officer, AFC, Mr. Andrew Alli, said he was happy to find CEC as a potential partner.

The power privatisation in Nigeria offered an opportunity for huge investment by CEC and AFC outside Zambia, Alli said.