Message Ven 2 Avr 2010 07:02

CEC reveals its growth strategy By Kabanda Chulu in Kitwe Fr

CEC reveals its growth strategy
By Kabanda Chulu in Kitwe
Fri 02 Apr. 2010, 04:00 CAT [32 Reads, 0 Comment(s)]

Text size
COPPERBELT Energy Corporation (CEC) has revealed that its future growth strategy is based on seeking concessions to develop generation and transmission projects that will have a positive impact in the region.

And CEC’s revenue has reduced by 13 per cent from US $ 177 million in 2008 to US $ 154.2 million in 2009 due to a 15 per cent reduction in sales to the mines.

Releasing the 2009 financial reports, CEC managing director for corporate development Michael Tarney said that regional countries had interconnected power grids that enable electricity to flow, for instance from DR Congo to South Africa.

He observed that Zambia was at the centre of this interconnected grid network hence transmission and generation projects would have regional impacts.

Tarney said that an infrastructure agreement had been signed with the Congolese utility SNEL, to result in construction of a new dual circuit 220 kilovolts transmission line that will facilitate the transfer of 550 megawatts of power from the DR Congo to Zambia.

He said that tenders for the lines and substation equipment were issued and adjudicated last month and construction and commissioning were expected to be complete by mid-2011.

“For CEC to grow we need to invest more and play a key role in future generation and transmission projects and the total project cost, including internal costs that have accumulated during the design and development of the line is expected to be US $ 16.2 million, which has been funded by CEC through its existing corporate debt facilities and the funding for SNEL has been provided through a World Bank facility as part of the Bank’s Southern Africa power market programme,” Tarney said. “CEC is earning a return on this investment through receiving power available for export from SNEL, which can be on-sold to utilities and large electricity users within Southern Africa. The transmission line will be fitted with optical fibre that will facilitate the connection of Katanga Province to the CEC and Zesco fibre networks. This fibre will also be used to enhance operational communications between the utilities and to provide a basis for linking telecoms providers in Katanga Province to telecoms providers in Zambia.”

He said the turnover for 2009 reduced to US $154 million from US $ 177 million in 2008 due to a reduction in sales to the mines.
“However, there was a compensating 30 per cent increase in domestic wheeling income to US $ 10.6 million, largely as a result of the commencement of supplies to the Frontier Mine but the cost of sales, which mainly comprise purchases from Zesco decreased by 13 per cent to US $ 111.8 million. The gross profit decreased by 14 per cent to US $ 42.4 million from US $ 49 million in 2008,” said Tarney.