Wednesday, November 5, 2008

Zambia awards thermal power project to India's ERAM

By Shapi Shacinda

LUSAKA (Reuters) - Zambia has selected India's ERAM to construct a major thermal power station initially projected to generate 300-350 megawatts of electricity, Zambian Commerce and Trade Minister Felix Mutati said on Friday.

"A delegation from ERAM will be in the country next week to sign an agreement, at which (time) we will disclose all the financial details of how much will be involved and how long it will take to build the power station," Mutati told a briefing in Lusaka.

He added that ERAM had been granted the project because of its experience with similar developments in India. Development of the Zambian power station will begin once a final agreement is signed, Mutati said.

The announcement followed a tendering process that began in April.

Mutati also the government will soon invite potential developers for the Kafue Gorge Lower power project, where 750 megawatts would be generated and that it would target hedge financiers. The project could cost over $1 billion.

Zambia is facing a power crisis and has been forced to ration electricity to residents. The bulk of its power goes to its copper and cobalt mines, which represent the country's economic lifeblood.