Nigerian bank to finance Zambia electricity project
A Nigerian investment bank will partner Zambia’s largest distributor of power to mines in the financing and development of six new hydroelectric power stations worth over $1 billion in Zambia, an industry official said on Thursday.
Michael Tarney, the managing director for corporate development at Zambia’s Copperbelt Energy Corporation (CEC), told Reuters the six projects had a total capacity of more than 800 megawatts (MW).
Tarney was speaking after the signing of an agreement for the joint development of power projects by CEC and the Nigerian company.
“We are immediately looking at the $150 million Kabompo gorge hydro power project in north-western Zambia and the five Luapula river projects estimated to cost $1 billion,” he said.
The Kabompo project was moving well with financial close expected to be reached this year, he said.
“The Luapula projects have a combined capacity of 800 MW and this year we are doing feasibility studies but I think we should be starting construction maybe 2013-2014,” he said.
The relationship with Africa Finance Corporation should boost CEC’s chances of winning the bid for units of a Nigerian state power company lined up for privatisation, Tarney said.
Nigeria is currently blighted by persistent electricity outages.
It plans a multi-billion dollar privatisation of its power sector to improve efficiency and had split the distribution network of Power Holding Company of Nigeria into 11 different units valued at about $100 million each.
“The relationship with Africa Finance Corporation whose shareholders include the Nigerian government means we have a local partner,” he said.
African Finance Corporation CEO Andrew Alli said he was happy to find CEC as a potential partner.
The power privatisation in Nigeria offered an opportunity for huge investment by CEC and Africa Finance Corporation outside Zambia, Alli said.