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India’s Nava Bharat Ventures Ltd expects to reach financial close on $560m long term debt financing for a $800m, 300MW coal mouth power project in early 2014. The African Development Bank (AfDB) approved a $150m loan for the project on 2 October (AE 263/7) and it is also supported by an export credit agency (ECA) facility from China’s Sinosure. It will burn low-grade coal which is currently at risk of spontaneous combustion while lying dormant at the Maamba colliery. Financial close had been expected in October but has been delayed as the Chinese sanction process is taking longer than expected.

Edinburgh-based Bowleven has been granted three exploration blocks in Zambia’s recent licensing round. The previously unlicensed blocks 25, 28 and 29 lie in the Luangwa Rift Valley, a north-east to south-west trending rift basin which last saw exploration in the 1980s. The initial exploration period includes a minimum work programme estimated at $500,000. The government held the bid round after issuing default notices to companies that had failed to carry out exploration work (AE 263/13). Bowleven also has Kenyan Block 11B with Chris Matchette-Downes’ Adamantine Energy, where an airborne geophysical survey is almost complete, as well as its core assets in Cameroon, where development has been slowed by the need to find a market for the gas associated with the oil.

Deputy mines, energy and water development minister Charles Zulu has told parliament that Sweden’s Eltel Networks has signed a contract with the Zambia Electricity Supply Corporation (Zesco) worth $150m. The contract will see the company connect all districts in North-Western Province and Lukulu in Western Province to the national grid on a 132kV overhead network by 2015. Work is expected to begin before end-2013.

The African Development Bank (AfDB) board approved a senior loan of up to $150m on 2 October for a 300MW mine-mouth coal power plant at Maamba and the refurbishment of the coal mine at the site. Maamba Collieries – a joint venture of Nava Bharat Singapore Ltd (65%) and government-owned Zambia Consolidated Copper Mines (35%) – is developing the project to use the low-grade coal produced as a by-product of mining at the site which is at risk of spontaneous combustion.The project is expected to cost around $800m and will comprise two 150MW units, using two 510 TPH steam generators with circulating fluidised bed combustion. It is designed with the potential to expand to 600MW.

Zambia plans to revoke and reissue petroleum exploration licences that have lain dormant since they were granted in 2010. Ministry of Mines, Energy and Water Development permanent secretary Victor Mutambo said bidders had been selected for ten blocks to be relicensed later this month. He said exploration had stalled as most of the companies granted licences lacked the necessary skills and were hoping to sell the blocks on at a profit. “To some, we have already issued default notices because, if you hold a licence and you do not do anything, it means speculative tendencies and, going forward, we just have to cancel these licences and readvertise them,” Mutambo told African Energy.

The International Finance Corporation (IFC) issued its first local currency denominated bond in Zambia on 19 September. The ‘Zambezi’ bond also represents a new venture for Zambia, as the IFC is the first non-resident issuer in the country’s domestic capital markets. The IFC bond was well received by domestic investors as well as international buyers spurred on by the US Federal Reserve’s unexpected announcement a day earlier that it would not begin to taper its $85bn/month asset-purchasing programme. With a final issuance of 150m kwacha ($28.4m) – 50m kwacha higher than originally planned – the order book was over 700m kwacha, equivalent to an oversubscription of 4.8 times.

ABB has won a $32m contract to build a new substation and upgrade an existing substation at First Quantum Minerals’ Kansanshi copper mine. Kansanshi, the largest copper mine in Africa, is 80% owned by First Quantum subsidiary Kansanshi Mining and 20% owned by a subsidiary of state mining company ZCCM. It is located 10km north of Solwezi and 180km north-west of the Copperbelt town of Chingola.

The trial of former president Rupiah Banda, which opened in April, has been suspended until October. Banda was charged with abuse of office in connection with a Nigerian oil deal with the Abuja-based Sarb Energy (AE 253/26). Former energy minister Kenneth Kongo, who was testifying as a state witness, rejected claims that Banda personally benefitted from the deal.

The World Bank’s International Finance Corporation (IFC) has obtained approval from Zambia’s Securities and Exchange Commission to issue kwacha-denominated bonds of up to 2.5bn kwacha ($460m). The IFC can now issue local currency bonds supporting local capital markets and increasing access to local-currency finance for the private sector. 
The bonds will be issued under the IFC Pan-African Domestic Medium-Term Note Programme, launched in May 2012 to facilitate regular bond issuances by the IFC in the region.

Zambia-registered private company Kalahari GeoEnergy Ltd will soon begin drilling on its geothermal prospects. Chief executive Peter Vivian-Neal told African Energy the company was investigating a number of targets on the periphery of the Kafue Graben, a Karoo-age sedimentary basin. In the first phase of drilling, Kalahari will drill three 330-metre shallow diamond core wells at Lochinvar, around 35km north-west of Monze.

Australia’s Swala Energy has submitted bids for three exploration permits. The bids are for Block 31, which includes part of Lake Tanganyika and was previously licensed to Rapid African Energy, and Karoo blocks 42 and 44 in the south of the country. If the applications are successful, Swala will have an 83% equity interest in any block awarded. Block 3, Zambia’s largest, lies within the East African Rift System, adjacent to acreage held on the Tanzanian side of the lake by Australia’s Beach Petroleum.

Finland’s Wärtsilä Corporation announced on 15 May that it had been awarded a ten-year operations and maintenance agreement for the 50MW heavy fuel oil (HFO) Ndola Energy Company Ltd (NECL) power plant in Zambia. NECL is a subsidiary of Great Lakes Energy NV. The power plant will comprise six Wärtsilä 32 generators using HFO from the Indeni refinery adjacent to the power plant. It is expected to begin selling power to the Zambia Electricity Supply Company Ltd in July.

The Southern African Power Pool (SAPP) is requesting expressions of interest for the Zimbabwe-Zambia-Botswana-Namibia (Zizabona) transmission line project. Finance is being provided by a grant from the African Development Bank. Work will be awarded in three separate tenders.

Fuel prices have risen by more than 21% after the government scrapped its increasingly costly subsidy regime. When he was elected in 2011, President Michael Sata’s Patriotic Front government removed a levy used to fund strategic fuel reserves and introduced a subsidy to keep down prices.

Former president Rupiah Banda is on trial in Lusaka, having been stripped of his immunity, arrested and charged with abuse of office in connection with a Nigerian oil deal with the Abuja-based Sarb Energy. Banda’s son Henry has also been named in court documents. Sarb Energy was reported to have been paid $2.5m for shipping oil to Zambia, but failed to deliver.