China’s ExIm and DBSA Finance Zambian Hydropower

China’s ExIm Bank and the Development Bank of Southern Africa (DBSA) have agreed to finance Zambia’s state-owned power utility Zesco Ltd. for the Kariba North Bank hydropower station. The Chinese investment bank will lend $315 million with the DBSA providing $115 million for the 360-MW dam.

The project’s extension, to be completed by November 2012, will add two new machines with a power generation capacity of 180 MW each, according to energy minister Kenneth Konga. The hydropower plant produces 540 MW but that will rise to 720 MW by October when the last of the existing four generators is upgraded. Zambia hopes to increase its hydropower sector which currently generates 1,800 MW with peak demand estimated to be 1,600 MW.

Meanwhile, the country signed an agreement with two Chinese companies to build the 600 MW Kafue Gorge Lower hydropower plant. China Development Bank will fund a JV with Zesco Corp., China Africa Development Fund, and Sino Hydro with a capital infusion of an initial $1 billion. Construction is expected to begin in April 2011 with completion to follow six years later.

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