Zambian Hydro Project Gleans $65 Million Grant and International Funding Support

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The $375 million Itezhi-Tezhi hydropower project in Zambia received a $65 million support grant from the European Investment Bank (EIB), the European Union's (EU) long-term lending arm.

The project is scheduled for completion in 2015 and will see power from the 120-megawatt hydro plant transmitted through a 291-kilometer line being constructed to the national grid and on to the capital Lusaka. The project uses an existing dam on the Kafue River. This will minimize the cost and limit environmental impacts. The dam was constructed in the early 1970s to regulate water flow for the Kafue Gorge power station further downstream.

The scheme is being developed by Itezhi-Tezhi Power Corporation with Zambia's power utility ZESCO and India's industrial conglomerate TATA (NSE:Tatapower) (Mumbai, India) each holding a 50% stake.

This is one of a number of projects intended to increase hydropower generation for the Southern African Power Pool, which is the regional electricity network; improve energy connections between countries in the region; and reduce Zambia's power deficit and reliance on imported electricity from coal-fired power stations. Electricity generation by ZESCO is almost entirely based on hydropower plants on the Zambezi and Kafue rivers.

Additional financing for the project will be provided by the French Development Agency (AFD), African Development Bank (AfDB), FMO (Netherlands), PROPARCO (France), Development Bank of Southern Africa, Republic of Zambia, TATA and the government of India.

"The impressive Itezhi-Tezhi project complements the EIB's support for upgrading the Kafue-Livingstone transmission line provided earlier this year," said Pim Ballekom, EIB's vice president for lending in Sub-Saharan Africa.

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