Message Ven 22 Jan 2010 08:22

CEC writes govt over construction of high voltage transmissi

CEC writes govt over construction of high voltage transmission line
By Kabanda Chulu
Fri 22 Jan. 2010, 04:00 CAT [39 Reads, 0 Comment(s)]


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COPPERBELT Energy Corporation (CEC) has written to government requesting for the rights to construct a high voltage transmission line from the Copperbelt into the Luapula Province in order to supply the increasing economic activities in the area.

And CEC managing director for corporate development Michael Tarney has stated that 2010 will be difficult on cash flow since the company will be investing heavily with US $8 million budgeted for capital expenditure on the core business while US $10 million will be spent on the second line of the interconnector with the DR Congo.

Giving a 2009 perspective and outlook for this year, Tarney stated that last year posed several financial challenges for the company.
“The global financial crisis had a major impact on our customers and we had challenges collecting money from them and yet we had to ensure we pay Zesco on time but we were not being paid by our customers.

This crisis has shown us that many of our customers operate old labour intensive deep shafts which make them to be high cost producers compared with more efficient newer mines, many of which are outside of CEC’s current area of operation in the Copperbelt,” Tarney stated in the latest CEC bulleting titled Watts on. “This means that if we are to grow further, we have to find new customers outside of the Copperbelt because this is where the new mines are coming up but the challenge will be to get the support to supply the new ones hence the request to government to construct a transmission line to Luapula is among the first step in that direction.”

He stated that CEC had delivered several presentations to development finance institutions where international fund managers were appraising the company with a view to buy shares.

“We have now been offered more financing to undertake more projects outside the core business, particularly from the Dutch Development Bank (FMO), Development Bank of Southern Africa (DBSA) and the International Finance Corporation of the World Bank,” stated Tarney. “But 2010 will be very hard on cash because we will be investing heavily, so cash outflows will be higher and US $8 million has been budgeted as capital expenditure on the core business with US $10 million to be spent on the DR Congo second line interconnector while US $5 million will be spent on the Kabompo Gorge Hydro project if feasibility studies reveal that the scheme is viable,” stated Tarney.