In a statement the bank said it has approved a US35M senior loan and a US$3M standby facility to Itezhi-Tezhi Power Corporation (ITPC) and a concessional loan of US$18M to the government as Zambia Electricity Supply Company (ZESCO)’s share of the equity to develop the hydro project.
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 230km upstream from the current Kafue Gorge Power Station, the project comprises construction and operation of an 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 said: “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 project will improve the reliability of electricity supply and enhance energy security in Zambia. It is also expected to have positive socio-economic externalities for the country.
“This project will support Zambia’s national plans for the energy sector, including promoting public-private investments in indigenous and renewable energy schemes,” said Chiji Ojukwu, AfDB Regional Director for Southern Africa. “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”
“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,” added Tim Turner, AfDB Private Sector and Microfinance Department Director. “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. ”
