Search results

GL Africa Energy chief executive Anders Langhorn has told African Energy that the 55MW expansion of the company’s Ndola heavy fuel oil (HFO) power plant in Zambia reached “substantial completion” on 30 January. The plant is in its final test and commissioning phase with reliability tests about to begin. The first 50MW at the Ndola power plant has been operating since November 2013 under a 15-year power purchase agreement, with six Wärtsilä 32 generators powered using HFO from the Indeni refinery.

Government officials say that nine companies continue to hold on to exploration acreage in Zambia, despite the unfavourable market conditions. Ministry of Mines and Minerals Development permanent secretary Paul Chanda told African Energy that Zambia remained “very confident” that oil and gas will be discovered despite a reduction in the number of companies exploring. Exploration work is currently suspended until after the rainy season which comes to an end in April.“The chances are there that we may discover either oil or gas or both.

The Southern African Power Pool project advisory unit (Sapp-PAU) is evaluating expressions of interest from consultants for a detailed bankable feasibility study for the construction of a 627MW hydropower station on the Luapula River and associated transmission lines to evacuate the power to both Zambia and Democratic Republic of Congo (AE 335/10). Sapp-PAU senior transaction adviser Omar Vajeth said the unit would issue a request for proposals to the shortlisted bidders. Zambia’s Zesco and DRC’s Société Nationale d’Electricité (Snel) asked the Sapp Coordination Centre (Sapp-CC) to help them develop the project, following an intergovernmental memorandum of understanding (MoU) signed in July 2015 by Zambia and DRC, along with an inter-utility MoU between Zesco and Snel.

The European Union on 19 January signed the financing agreement for a grant of €65m ($70m) for a project aiming to expand access to electricity to at least 63,000 people, and to social and public infrastructure and small enterprises. The European Investment Bank (EIB) is providing a loan of €15m alongside the project, which forms part of the wider Lusaka Transmission and Distribution Rehabilitation Plan financed by the EIB, the World Bank, and national utility Zesco.

Zambia and Zimbabwe plan an investment conference on 28 February in Lusaka to attract investors to finance and build the 2,400MW Batoka Gorge hydropower project on the Zambezi River.The two countries plan to build the project as an independent power producer using a special purpose vehicle under the supervision of the Zambezi River Authority (ZRA). The conference aims to attract development finance institutions, bilateral partners and local, regional and multinational private sector organisations. African Development Bank president Akinwumi Adesina is expected to be among the keynote speakers.

The government is under pressure to split Zesco into generation, transmission and distribution arms as a precursor to privatisation, as part of a $1.5bn support package under negotiation with the International Monetary Fund (IMF) to bail out the struggling economy.According to sources close to the transaction, finance minister Felix Mutati has agreed at talks in Washington to restructure Zesco as a way of making the power utility more efficient. “Chances of the company (Zesco) being privatised are high,” a senior government official close to the Treasury told African Energy.

Zambia and Democratic Republic of Congo (DRC) are advancing with long-standing plans to develop the hydropower potential of the Luapula River. In early November, the Southern African Power Pool (SAPP) invited expressions of interest from consultants to carry out a detailed bankable feasibility study for the proposed Luapula River Hydroelectric Scheme on the border between the two countries. Bids were due by 25 November. The SAPP Project Advisory Unit is acting as the implementing agent for the project on behalf of Zambia’s Zesco and DRC’s Société Nationale d’Electricité. In July 2015 the two countries signed an intergovernmental memorandum of understanding (MoU) and an inter-utility MoU to expedite the project.

Finance minister Felix Mutati has said the government will pull out of the procurement of finished petroleum products next year. In his budget address to parliament on 11 November, Mutati announced that, to improve the efficiency of fuel imports and rein in the surging fiscal deficit, procurement of finished petroleum products will be undertaken solely by private companies from March 2017. “The government’s role will be limited to regulation… regarding pricing, the government will adjust prices in line with changes in market conditions,” Mutati said.

After increasing fuel prices in October, the cash-strapped government now plans to raise power tariffs as a further step to eliminate energy subsidies and make investment in new generation projects more attractive. “Our policy is to quickly migrate to economic tariffs so that we attract the much-needed private sector investments into greenfield power generation facilities and also pursue other energy mix,” energy minister David Mabumba said. He did not specify when or by how much electricity tariffs would rise, but the government is under pressure to rein in a widening fiscal deficit set to reach 10% of gross domestic product this year.

The Energy Regulation Board (ERB) has announced an average 36% increase in retail fuel prices with effect from 14 October as the government starts implementing an austerity programme that will also lead to an increase in electricity tariffs. Zambia is facing significant economic problems as a result of a fall in copper prices coupled with high government spending on infrastructure projects, emergency power imports and subsidies. The government is in talks with the International Monetary Fund about a potential financing package.

Zambia is under pressure to end fuel subsidies as a condition for an International Monetary Fund (IMF) aid package to help tackle a worsening financial crisis, though the proposals could face popular opposition in the aftermath of August’s highly divisive election. The country is expected to finalise a new IMF deal in December worth between $1.2bn and $1.5bn. Macroeconomic parameters are at some of their worst levels since donors forgave Zambia several billions of dollars of debt in 2005 under the Heavily Indebted Poor Countries initiative.

Nava Bharat Ventures announced in late July that Maamba Collieries has synchronised the first 150MW unit of a coal power plant to the grid. The much-needed power has come later than planned, with Zambia purchasing power from emergency power plants and the Southern African Power Pool in the interim as hydropower plants have suffered from drought and poor management. Nava Bharat said that “the synchronisation of the second 150MW unit will follow soon while stabilisation and commercial operations of the two units will be pursued in the coming weeks”.

With a month to go before elections, state power utility Zesco has reduced daily power cuts to households from eight or more hours to four hours, in a move expected to boost President Edgar Lungu’s chances of another five-year term. However, the reduced load-shedding does not apply to mining companies, which are still restricted to less than 30% of their peak power demand. Zesco spokesman Henry Kapata said the utility was importing 90MW from a power barge docked at Mozambique’s Nacala port, 48MW from Aggreko and 75MW from Electricidade de Mocambique.

Tullow Oil has extended its East African rift play acreage through the award of Petroleum Exploration Licence 28 in the Luangwa Trough, previously awarded to Bowleven. Tullow said the 55,000km2 block built on its existing low-cost, core East African Tertiary rift basins, giving access to three further unexplored basins. Within the first two years of the licence, Tullow plans to complete initial geological studies, acquire a full-tensor gradiometry survey and collect passive seismic data.

Announcing financial results for the year to 31 March, India’s Nava Bharat Ventures (NBV) said the second 150MW unit of its 300MW Maamba coal power plant will begin operating by the end of July. The first unit is expected to come online by the end of June. Financial close for the integrated mining project, owned by Maamba Collieries Ltd – a joint venture of NBV (65%) and Zambia Consolidated Copper Mines Investment Holdings (35%) – was reached in July 2015, with a small portion of debt remaining to be financed by NBV.