LUSAKA (Reuters) - China plans to spend $1 billion to help build a power plant to boost Zambia's electricity supply by 600 megawatts, a senior official in Africa's top copper producer said on Tuesday.
Jiang Chaol Liang, president of the China Development Bank, said China was ready to provide equity amounting to $1 billion for the Kafue Gorge Lower power plant.
Construction of the plant was expected to begin next year, and will be completed in 2017.
The government has said the Kafue Gorge Lower power plant, estimated to cost $1.5 billion, will help reduce a power deficit expected in 2011, due to increased mining output as more foreign owned mines bring their new projects into production.
Energy Minister Kenneth Konga said Zambia would seek to conclude negotiations with the Chinese bank so that the project could take off as planned, but he did not indicate when the negotiations would start.
"This project is key to boost power generation both locally and within the (southern African) region," Konga said.
Analysts say decades of poor investments in the country's power infrastructure and a rising demand in domestic use of electricity, coupled with higher demand in the mines and other industry have caused a shortage of power in Zambia.
In 2008, the state-run power utility Zesco rationed electricity supply countrywide, including to the copper mines, leading to loss of production.
The government plans to engage the private sector to help build the Kafue Gorge Lower hydro power project in a two-stage tender process.
Zambia generates 1,400 MW of electricity and consumes about 800 MW but demand rises to 1,500 MW at peak times.
Reuters Africa
