PF scores as EIB pledges to fund key Zambian electricity link

The European Investment Bank has agreed to provide USD 30 million to fund the upgrade of the Kafue – Livingstone transmission line in Zambia.

According to the European Investment Bank, this project will improve regional energy distribution and double electricity transmission capacity between the Victoria Falls hydro-power station and Lusaka, and is a priority initiative for the Zambia Electricity Supply Corporation.

Funding agreements were signed in Lusaka by the Zambian Minister of Finance Alexander Chikwanda MP, and senior officials from the European Investment Bank. Representatives of the Zambia Electricity Supply Corporation and European Union Delegation to Zambia were also in attendance.

“Access to electricity is essential to achieve the Millennium Development Goals and promote sustainable development. Upgrading the Kafue – Livingstone transmission line will assist the Zambian Government’s efforts to ensure that a reliable supply of energy can keep pace with economic growth in Zambia and improve electricity distribution across southern Africa. The European Investment Bank is committed to supporting the Zambian energy sector and contributing to global goals highlighted by the 2012 International Year of Sustainable Energy for All.” said Plutarchos Sakellaris, European Investment Bank Vice President.

“We all know that access to energy is crucial for the development of Zambia. Energy is so important for the delivery of health services, education, food security, business activities, and economic development in general. Through the promotion of our technology, expertise and financial aid, the EU helps increasing access to energy services for the Zambian population.” said Ambassador Gilles Hervio, Head of the Delegation of the European Union to the Republic of Zambia and COMESA.

“Upgrading of the Kafue – Livingstone transmission line project will provide extra power to the southern and western provinces of Zambia and other countries in the Southern Africa Power Pool” added ZECO Managing Director, Cyprian Chitundu.

Upgrading the 341 km Kafue – Livingstone transmission line will significantly enhance electricity transmission through the only major electricity connection in south-western Zambia. The project will enhance the energy link of regional importance between Zambia and Namibia and enable the possible trading of electricity through the Caprivi interconnector. The energy improvement scheme will include construction of new substations replacement of energy infrastructure over 50 years old.  The project is a priority in the ZESCO Master plan.  Overall transmission capacity will be increased from 120 MW to 360 MW. The European Investment Bank will also require that specific environmental concerns are addressed during project implementation.

The Kafue – Livingstone transmission line will allow power flows between the northern and southern part of the Southern African Power Pool to bypass Zimbabwe and reduce the risk of regional electricity blackouts.  Use of renewable energy in the region will be reinforced through increased access to hydropower and the project will reduce Zambia’s dependence on electricity generated from oil and coal.

The project is expected to be completed by the end of 2014 and will create significant technical employment during the upgrade. The original line was built in the 1970s to allow easy and cost-efficient upgrading when necessary. The upgrading scheme will use existing infrastructure and proven technology, resulting in low environmental impact and reduced investment costs.

The transmission line will be supported by the EU-Africa Infrastructure Trust Fund through a total grant of EUR 5.55m split in two different components. This includes a EUR 5.2m interest rate subsidy and a Technical Assistance Grant of EUR 350,000 to support procurement and monitoring.

The total project cost is estimated at USD 100m and will be co-financed by the European Investment Bank, the World Bank and by the project Promoter, the Zambia Electricity Supply Corporation, ZESCO.

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