Tuesday, October 7, 2008

China firm to spend $400m on Zambia power project

Sino Hydro of China will spend $400-million to expand the Kariba North Bank power station, part of Zambia's broader expansions to meet rising demand from the country's vast copper and cobalt mines.

Under the deal, 85 percent of the money will be provided by Exim Bank of China, the state-owned Times of Zambia quoted Commerce and Trade Minister Felix Mutati as saying.

Mutati said the expansion would start in October but he did not indicate when the project would be completed.

"Sino Hydro of China next month will start the power generation expansion programme at Kariba North Bank power station," Mutati said.

"The Chinese company will invest $400-million in the project and 85 percent of the investment will come from China Exim Bank," Mutati told the newspaper.

Sino Hydro chairman Huang Boadong said on state-run ZNBC radio that the expansion of the Kariba North Bank power station would comprise installation of two generators with a total capacity of 360 MW of power.

Huang said the project which was initially expected to last four years could be concluded six months ahead of schedule.

State power utility Zesco Ltd., has previously said the Kariba North bank power station, which currently generates around 600 MW of electric power, would be expanded to 900 MW or more.

Zesco has also said it would provide 15 percent of the expansion budget.

Resource-hungry Chinese firms have shown major interest to invest in Zambia expanding copper and cobalt mining industry - the country's economic lifeblood - and manufacturing, after authorities created the Chambishi tax-free economic zone.

China has pledged to invest a total of $900-million at the Chambishi multifacility economic zone, where its firms are exempted from paying taxes, including customs duty on imported machinery and equipment.