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The Board of Directors of the African Development Bank (AfDB) has approved a USD 35-million senior loan and a USD 3 million standby facility to Itezhi-Tezhi Power Corporation (ITPC) and a concessional loan of USD 18 million to the government as Zambia Electricity Supply Company (ZESCO)'s share of the equity to develop the Itezhi-Tezhi hydropower plant project that will provide reliable, low-cost power and sustainable energy to the country.
The project was approved on 13 June 2012, and will be implemented by Itezhi-Tezhi Power Corporation (ITPC), an SPV incorporated in Zambia whose shareholding includes TATA Africa (50%) and ZESCO (50%). Located at the site of the Itezhi-Tezhi dam on the Kafue River in Zambia, about 230 km upstream from the current Kafue Gorge Power Station, the project comprises construction and operation of a 120-MW independent hydropower plant in a concession under a Public-Private Partnership arrangement.
Commenting on the project, Hela Cheikhrouhou, Director of AfDB Energy, Environment and Climate Change department says 'The AfDB approaches this project as an integrated Public-Private Partnership, as our institution is uniquely positioned to provide both private and public financing, which will reduce the risk of funding gaps and timeline mismatches for the implementation of the power station and the transmission line.'
The Itezhi-Tezhi hydropower plant project will improve the reliability of electricity supply and enhance energy security in Zambia.
For his part, Chiji Ojukwu, AfDB Regional Director for Southern Africa said: 'Zambia and the Southern African region, continue to experience strong demand for power due to high economic growth and growth in the mining industry. Half of the region's power deficit amounting to 1,195 MW is attributable to Zambia. This project will support Zambia's national plans for the energy sector, including promoting public-private investments in indigenous and renewable energy schemes. It will unlock the natural resource endowments located in remote rural areas. The ultimate impact is two-fold: the power grid is extended to reach previously unconnected areas, and the whole nation and region will have access to reliable, affordable and environment-friendly source of energy'
Beyond ensuring energy security the project will have positive socio-economic externalities for the country.
Finally, Tim Turner, AfDB Private Sector and Microfinance Department Director noted. 'The project will also create an estimated 700 temporary and 120 permanent jobs in the region, support economic growth and social development in Zambia and the countries to which power is sold and ultimately promote regional integration. Moreover, a number of AfDB programs in the social sector in Zambia and many projects in productive sectors require energy for efficient implementation. This project will ensure that such a basic input is available to the country. It will help to implement both social programs and commercial projects, contribute additional value to the economy and boost income for the population. '
News date: 19/06/2012