INVESTORS TO FUND BATOKA PROJECT:
THE development of the Batoka Gorge Hydro-Electric Scheme has received stimulus with international financial institutions and private investors agreeing to finance the $4 billion power project.
This came out at an investment conference called to solicit for finance for the major electricity project which is expected on stream by 2024. BGHES will produce 2 400MW to be shared equally between Zambia and Zimbabwe.
The investment conference underway in Livingstone, Zambia ran under the theme, Batoka Gorge Hydro-Electric Scheme: Harnessing Sustainable Power Generation Potential of the Mighty Zambezi River.
Energy and Power Development ministry permanent secretary Partson Mbiriri said investors’ interest was encouraging.
“We have institutional investors who are present here. A number of banks came to the fore, Standard Chartered Bank, Stanbic Bank and most of the prominent southern African banks are certainly here in attendance and behind them of course their parent banks,” said Mr Mbiriri.
Lead financial arranger, the African Development Bank, which is planning to invest $2 billion in energy projects in Africa by 2020, expects to channel funds towards BGHES.
The bank’s vice president of the Power, Energy, Climate and Green Growth cluster, Amadou Hott said energy is important for Africa.
“This year we are expecting to invest from our own resources $2 billion in the energy space in Africa. We are here today to discuss the Batoka Hydro-Electric Scheme project one of Africa’s top priorities. As a lead co-ordinator we will execute in partnership with the World Bank and other DFIs.
“We shall also work with commercial banks but more importantly we shall find a way to involve local as well as international investors.
“For local investors in both countries, the capital markets, special funds will allow Zambians and Zimbabweans to own even a little share in this project and the bank is ready to support that. Let us realise this potential together. Let us all rise up to raise ‘baby Batoka’ to light up and power Zambia and Zimbabwe,” said Mr Hott.
AfDB has been working with both Zimbabwe and Zambia on other energy projects.
Another potential funder, Standard Chartered Bank which has in the past invested more than $5 billion in power generation in Africa, said it was looking at the BGHES with keen interest.
Standard Chartered Bank Global Banking Africa head for Saif Malik said the bank will evaluate the project with a view to taking a position.
“We have already invested in power in Africa and in Zambia so this will be another project we will evaluate. If it makes sense, we obviously will be part of it,” said Mr Malik.
Development financial institutions, multilateral and bilateral financial institutions in attendance at the conference showed keen interest in promoting the Batoka project.
Project financiers, developers, contractors, investors, power off-takers also attended the conference.
BGHES will be developed under the auspices of the Zambezi River Authority, a bi-national organisation mandated to operate monitor, and maintain the Kariba Complex as well as exploit the full potential of the Zambezi River is implementing the Batoka Hydroelectric project.
“The project is key not only to Zambia and Zimbabwe but to the SADC region. The Batoka Gorge Hydro Electric Scheme is a critical regional as well as continental project. It is no secret that Africa especially Sub-Saharan Africa has the lowest electrification rate as well as per capita electricity consumption in the world,” said Energy and Power Development Minister Samuel Undenge while addressing the investment conference.
“A recent World Bank report states that only 35 percent of households in this region have access to electricity. It is said that the combined generation capacity of the region is less than that of Spain. How many of our people are we depriving of electricity and what impact does this have?”
He said the current installed generation capacity in the SADC region amounts to 58 000MW. Out of this, about 47 000MW is operating against a demand of around 53 000MW giving an operational deficit of around 6 000MW. The pace of commissioning new projects is still slow, but the electricity deficit is expected to be overcome.
More than 620 million people in Sub-Saharan Africa remain without access to electricity and nearly 730 million people rely on the traditional use of solid biomass for cooking.