Mer 5 Aoû 2015 11:57
Chinese lenders lead team to finance Zambian coal power plan
* Electricity needed for growing mining, household demand
* Project developer to also export power to neighbours
By Jacob Gronholt-Pedersen and Jessica Jaganathan
SINGAPORE, Aug 5 (Reuters) - Chinese banks are leading a group of lenders in financing a 300 MW coal-fired power plant in Zambia that is needed to meet rising demand from miners and an electricity-starved public.
Zambia's power demand is expected to double between 2010 and 2020 to almost 3,000 megawatts (MW), official data shows, with most of the electricity going to the mining industry. New plants are needed to plug a looming shortfall as current capacity is below 2,000 MW.
The new power plant is part of an $828 million project that includes revamping Zambia's biggest coal mine and aims to tackle power shortages that are curbing copper mining operations.
The plant - to be commissioned by mid-2016 - is being constructed by Chinese companies. The mining and power venture is also the first private project in sub-Saharan Africa for which the Chinese portion of the financing is to be covered by China's state-owned export credit insurance agency Sinosure.
"In terms of competitiveness in price and execution, the Chinese were way better than the other competitors who bid for the project," Ashwin Devineni, managing director of the international business unit of Nava Bharat Ventures, told Reuters in an interview in Singapore.
The Indian company holds a 65 percent stake in the project.
China has pledged some $30 billion in credit lines to Africa over the last two years. It was the biggest foreign investor into infrastructure projects in Africa in 2013, with state export banks leading investments worth $13.4 billion, data from the African Development Bank showed.
For the coal mine and power project, Bank of China and the Industrial and Commercial Bank of China will provide $300 million, while western banks including Standard Chartered and Barclays will finance $65 million, Nava Bharat Ventures said.
Another $150 million is coming from development banks in South Africa, itself a major coal producer that suffers from power shortages.
Zambia, Africa's No.2 copper producer, relies almost solely on hydropower and struggles to supply households - 70 percent of which have no access to electricity - as well as miners operating in the country, including First Quantum Minerals , Vedanta Resources, Glencore and Vale .
A drought recently forced utilities to cut power to miners by as much as 30 percent.
"Zambia is now facing the brunt of going all hydro," said Devineni. "The economy ... requires good baseload (24 hours) power. That is where we come in."
At a later stage Nava Bharat Ventures may triple capacity to meet demand for electricity from neighbouring countries such as Botswana and Namibia. (Editing by Henning Gloystein and Tom Hogue)