Power Interconnector Links Spread through Southern Africa

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Five institutional investors have pledged their backing for the $233 million power transmission interconnector project, which will link Southern African Development Council (SADC) countries Zimbabwe, Zambia, Botswana and Namibia (ZiZaBoNa). The potential investors revealed their interest in the project at a recent investors roundtable held in Swakopmund, Namibia.

The project is being promoted a part of SADC's plan for regional integration. It will have the capacity to increase power trading among participating utilities, and it will provide an alternative route to assist in the decongestion of the existing central transmission corridor that is operating through Zimbabwe.

The total $223 million in funds required for the project will involve $67 million in equity and $156 million in debt financing. The investors that have pledged more than $160 million to the project are African Development Bank, Development Bank of Southern Africa (DBSA), European Investment Bank, French Development Agency (FDA) and Stanbic Botswana.

DBSA has offered to contribute more than $50 million over a 17-year period. FDA has pledged to commit between $30 million and $50 million, and AfDB will pick up 40% of the debt financing.

Under the ZiZaBoNa agreement signed in 2008, the power utilities from the four countries--Zimbabwe Electricity Supply Authority, Zambia Electrical Supply Corporation, Botswana Power Corporation, and Namibia Power Company--were expected to finance those parts of the project sited within their national borders. The project will be organized as a special purpose vehicle and incorporated in Namibia. The four utilities will take a stake of 20% equity each.

The initial capacity Phase I of the transmission interconnector project will be 300 megawatts (MW), which will be phased up later to 600 MW. Phase I of the project will cover the construction of a 120-kilometer (km), 330-kilovolt (kV) line from Hwange power station in Zimbabwe to Victoria Falls, where a switching station will be built on the Zimbabwean side of the Zambezi River and which will then be extended to a sub-station in Livingstone, Zambia. Phase II will involve the construction of a 300-km, 330-kV line from Livingstone to Katima Mulilo in Namibia, through Pandamatenga in Botswana. The Zimbabwe-Zambia interconnector will be a high-voltage, 430-kV line, but during the first phase it will operate a 330-kV line. The project is scheduled for completion in 2015.

In another parallel development in the region, the Mozambican Indian Ocean port of Nacala's special economic zone will receive power through a new high-voltage line from the Chimuara substation on the north bank of the Zambezi. Power would be drawn from new power stations planned for the Zambezi Valley and a new power unit at the Cahora Bassa hydropower dam.

The power would not only go to industrial users and regional exports, but toward the electrification of domestic households, where currently about 3 million of the 7.8 million population receive power from isolated systems, mainly driven by solar power.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.