Despite keeping USD$ 750 million in an account at the bank of Zambia, the PF regime has borrowed another USD$ 50 million for the Itezhi-Tezhi hydro power and transmission line project.
Finance minister Alexander Chikwanda who signed on behalf of the PF regime said the US$50 million loan be used to finance the construction and operation of a 120 megawatt hydro plant at Itezhi Tezhi dam along the Kafue river.
Chikwanda said once completed, the project will significantly increase the country’s power supply which at the moment stands at 1000 megawatts.
Chikwanda explained that the increase in electricity generation and distribution will assist in reducing the erratic power supply which is currently being experienced in the country.
He said it will also contribute to providing adequate energy to complement the country’s fast growing economy.
ADB Vice President for Operations, Infrastructure, Private Sector and Regional Integration, Gilbert Mbesherubusa who signed for his organisation was of the view that that the Itezhi Tezhi hydro power project is economically attractive and that its development will help address Zambia’s growing power deficit.
Mbesherubusa said the project was a milestone as it will open Zambia’s first Public Private Partnership (PPP) in the energy sector.
He said the project was also critical for planning the long-term and sustainable performance of the Zambia Electricity Supply Corporation (ZESCO), equitable tariff structures and the provision of a reliable service that underpins the economic growth of the nation.
But Zambia already borrowed USD$ 750 million in September 2012, through a Eurobond for such infrastructure development.
The borrowing of the USD50 Million adds to the already rising external debt. The debt is now close to $3 Billion.
When Zambia borrowed the $750 million through a Eurobond, the country already had USD 1.5 billion external debt, according to revelations made by Ministry of Finance Director for Investments and Debt Management Fortune Kamusaki.
This means that the debt in September, 2012 was more than $2.5 billion