Search results

Zesco has announced a deal with Power China to add 600MW of solar power to its grid in 2022.The Chinese contractor will build three solar PV projects in Chibombo, Chirundu and Siavonga districts on an engineering, procurement and construction plus finance basis. The debt required for the project is around $548m. Power China is the parent company of Sinohydro, which already accounts for 67% of Zesco’s debt. The Power China projects appear aimed to replace the second round of Scaling Solar, through which Zambia had intended to procure 600MW.

Kalahari GeoEnergy expects to drill three geothermal resource delineation slim wells and complete feasibility studies in the next ten months, provided coronavirus restrictions are eased soon. The Bweengwa River geothermal resource in the Kafue Trough west of Lusaka has about 15MW of power generation capacity at 50% probability, and the aim of these studies is to raise this to 90% probability, Kalahari GeoEnergy chief executive Peter Vivian- Neal told African Energy.

Most immediate concern focuses on Zambia, whose commodities- based economy had attracted eurobond, Chinese and other investors, but which has got into major problems on President Edgar Lungu’s watch. These pressures have been significantly exacerbated by liabilities that were not until recently included in the Ministry of Finance’s official debt data – many of them linked to Lungu’s favoured infrastructure and other projects. Finance minister Bwalya Ng’andu has admitted that unrecorded “project loans” amount to $7bn, in addition to the previously accepted $11bn-$12.6bn of official sovereign debt his ministry controls.

Konkola Copper Mines (KCM) has challenged a decision by Copperbelt Energy Corporation (CEC) to restrict power supply to the miner to force it to pay $132m of outstanding electricity bills. CEC announced the plan on 18 May, but KCM sought an injunction in the Kitwe High Court in an effort to overturn the decision.The case opened on 26 May and was adjourned to 22 June. In the meantime, the power supply to the mine remains uninterrupted.

Zesco is proceeding with its legal pursuit of Copperbelt Energy Corporation (CEC) over payments from Konkola Copper Mines (KCM) following the collapse of talks to extend a long- term power supply contract. In September 2019, Zesco announced its intention to sue CEC over a $45m bill for power supplied to KCM, Zambia’s biggest underground mine. Zesco claims that CEC has failed to pay for electricity supplied under their Bulk Supply Agreement (BSA), which expired at the end of March 2020.

Liquidity-constrained Zesco is seeking to borrow from the country’s biggest pension fund to complete the 750MW Kafue Gorge Lower (KGL) hydro project. Zesco chairman Mbita Chitala told Zambia National Broadcasting Corporation the utility was in talks with pension funds to finance the transmission line element of the scheme. He did not name the fund in the 21 April interview, but industry sources confirmed the utility was talking to the National Pension Scheme Authority, the country’s biggest pension fund, which the government regularly dips into to pay civil servants’ salaries.

Zambia has pledged to maintain electricity supplies to the mining industry despite the expiry of the power supply agreement between Zesco and the privatised Copperbelt Energy Corporation (CEC).The bulk supply agreement (BSA) expired on 31 March, ending a 23-year-old arrangement for electricity supply to the country’s economic mainstay sector. The government says Zesco will continue supplying power to the Copperbelt for up to 12 months while a long-term solution is sought.

Construction of the 750MW Kafue Gorge Lower (KGL) scheme had been expected to be completed in phases this year with the first 150MW turbine on line in April, but timings have been hit by travel restrictions imposed to limit the spread of the Covid-19 pandemic. Zesco generation director Fidelis Mubiana told journalists in Lusaka the utility was still evaluating the impact. “Our main contractor Sinohydro is based in Wuhan, which (was) the epicentre of the coronavirus,” Mubiana said. “We are reviewing, but our focus is to ensure that we commission the plant as soon as possible.”

Kleinschmidt Associates has been awarded a contract funded by the US Trade and Development Agency to carry out feasibility studies for the Chilongo and Chimpili hydropower projects. Chilongo is being developed by MPF Development Consultants at Chilongo Falls on the Lufubu River in Kawambwa district, Luapula province. Chimpili is being developed by Bukota Company on the Kalugwishi River in the same district.

A general procurement notice has been issued for the $595m Tanzania-Zambia transmission interconnection project. Work includes construction of the 620km 400kV Iringa-Kisada-Mbeya-Tunduma double-circuit transmission line and 400kV Tunduma-Sumbawanga single-circuit line, as well as a 4km 400kV double-circuit line from Tunduma to the Zambian border, which will be energised at 330kV. The Iringa substation will be upgraded from 220kV to 400kV and 400/220/33kV substations will be built at Kisada, Mbeya, Tunduma and Sumbawanga.

State power utility Zesco and Copperbelt Energy Corporation (CEC) have agreed to come up with a new Bulk Supply Agreement (BSA) to replace the current 20-year power supply deal which expires next month, according to sources close to the negotiations.The BSA makes CEC the single biggest buyer of power from Zesco. The government wanted Zesco to start selling power directly to mining companies in a bid to bolster its finances, while the miners prefer to continue their current agreement with CEC.

Concerned by Zesco’s soaring debt to IPPs, Zambia plans to overhaul its electricity sector to bring more transparency and stability in power pricing while increasing private sector participation. The 2019 Electricity Bill currently before parliament aims to liberalise the grid, ending the single-buyer model and reducing Zesco’s dominance of the power sector. Expected to obtain parliamentary approval this year, the new law seeks to regulate the generation, transmission, distribution and supply of electricity so as to improve supply and encourage private sector investment.

The influential central committee of the ruling Patriotic Front (PF) party has called on the Ministry of Energy to resolve an impasse over talks to extend an agreement that allows Copperbelt Energy Corporation (CEC) to buy power in bulk from Zesco for resale to mining companies.“The central committee (of the PF) directed the Ministry of Energy to amicably resolve the impasse between the two institutions. As you might be aware, CEC is single bulk buyer of power from Zesco.

Zambian authorities say they expect to lift fuel pump prices after a fall in the value of the kwacha currency following the start of electricity imports from Eskom. The kwacha has come under pressure after the government announced that it had paid South Africa $27m to import 300MW of emergency power to cushion power outages caused by drought. The kwacha depreciated by 5.6% against the US dollar in November, and on a year-to-year basis it has fallen by 17.6%.

Zambia’s government announced on 19 November that it had approved the establishment of a creditworthy renewable energy intermediary power offtaker, facilitating the establishment of GreenCo in the country. The intermediary offtaker will sit between Zesco and IPPs, providing a better credit risk to banks by offering risk mitigation and the right to sell power elsewhere in the event of a default.