Wednesday, November 5, 2008

Exim Bank clears funds for Tatas' Zambia power project

The Economic Times, 06/10/2008

Singur might haunt the Tata Group for quite some time, but there is some good news from Africa for the beleaguered business conglomerate.

The Exim Bank of India has cleared a Rs 235-crore ($50 million) concessional loan for the Rs 1,000-crore ($230 million) Zambia power project, for which Tata Africa Holdings has been selected as the private sector partner.

The African arm of the Tata Group would be working in partnership with Zambia Electric Supply Corporation (Zesco) for a power generation capacity of 120 mw and a 3,450-km transmission line.

The development was discussed during the recent visit of Zambian minister for commerce, trade and industry Felix C Mutati to India, government sources said. Mr Mutati met commerce & industry minister Kamal Nath and representatives of the external affairs ministry.

Zesco and Tata Africa Holdings have issued an international tender for hiring contractors to build the $230-million power project, it is understood. The project is located at the Itezhi-Tezhi region on the Kafue river. A special purpose vehicle called Itezhi-Tezhi Power Corporation has been launched to handle construction of the 120 mw project, added sources.

Tata Africa Holdings, through which the Tata Group is handling this project, is based in South Africa. The contract is essentially for upgrading an existing project and adding new capacity of 120 mw, sources said.

Recently, India Tourism Development Corporation (ITDC) was selected by the Zambian government to build two five-star hotels in the country. The Zambian government is providing the land for hotels and ITDC is supposed to organise the finances and get the projects going with its technical expertise. Zambian president Rupiah Banda is personally monitoring the two projects.

Zambia is also looking at co-operation from India in infrastructure development, especially in mining. Agriculture is another area where the African nation expects collaboration with India. Road transport and construction are other areas of interest to Zambia, while the Indian side is looking at investment possibilities.

India can invest in industries which will use sugar, soyabean, groundnuts and cotton grown in Zambia as feedstock, it is felt. India-Zambia trade now stands at just over $200 million and officials feel there is scope for improvement.

India exports machinery, instruments, pharmaceuticals, fine chemicals, electronic goods, and transport equipment to Zambia. Items sourced from Zambia by Indian industry include pearls, precious and semi-precious stones, metal scrap and non-ferrous metals.