Lusaka- Despite experiencing biting energy shortages Zambia has had to delay a planned new hydroelectric power station by a year because of the global financial crisis, the World Bank announced Tuesday. The 750-megawatt (MW) Kafue Gorge Lower Hydropower Project, which is predicted to cost 1.5 billion US dollars, is aimed at ending recurrent power outages in Zambia and increasing power to the country's mines.
The International Finance Corporation, the World Bank's private sector investment arm that is advising the government on financing for the project, said it did not expect financial institutions to make funds available to the project until end 2009.
The financing agreement was initially slated for completion by January 2009.
IFC CEO Lars Thunell told Zambian state radio the corporation would have to consult with the investors to establish their ongoing interest in the project in view of the global financial shake-up.
Zambia, Africa's largest copper producer, is experiencing severe energy shortages that have forced major copper and cobalt mining companies to cut back production.
The southern African country cannot simply rely on importing power from its neighbours as it has done in the past because of the power crisis affects the region.
The government also wants to bring electricity to the 98 per cent of rural dwellers and 60 per cent of urban dwellers in the country of around 11 million people that currently do not have access to electricity.
The current installed generating capacity is about 1670 MW, of which 50 per cent is used by the mines.
Demand is anticipated to reach 2,500 MW in the next five years as several new mines and a new Indian-owned copper smelter begin production.
Last week, power supplies to the copper mines was cut by 16 per cent after state energy utility Zesco rationed electricity because several major transmission lines were being repaired.
About 15 local and international firms have shown interest in developing the Kafue station, including the country's second-largest copper producer Mopani Copper Mines.
