Zambian Power Plant Costs Nearly Double Original Estimate

7 September 2009 (Last Updated September 7th, 2009 18:30)

The cost of upgrading Zambia’s electricity infrastructure may cost as much as 80% more than budgeted for, according to the head of the country’s power utility. The construction of a 750MW power station at Kafue gorge and the upgrade of six existing generators at that plant will be betwe

The cost of upgrading Zambia’s electricity infrastructure may cost as much as 80% more than budgeted for, according to the head of the country’s power utility.

The construction of a 750MW power station at Kafue gorge and the upgrade of six existing generators at that plant will be between $1.5bn and $1.8bn compared with the initial estimate of $1bn.

The announcement was made by Cyprian Chitundu, the acting managing director of Zambia Electricity Supply Corp. or Zesco, the state-owned power utility, writes Bloomberg.

The utility plans to issue bonds worth $120m to help fund the expansion “by early March, at the latest June next year,” Chitundu told the news organisation.

The costs have rocketed due to the increase in commodity prices including iron ore and copper, which are required for the construction of power stations, Chitundu said.

Power consumption in Zambia, Africa’s biggest copper producer, has risen by 70% in the past five years, with most of the increase coming from the mining industry.

Failures at the Kafue and Kariba North Bank plants in October last year resulted in blackouts in Lusaka and other parts of the country.

The country needs 1,500MW of power to meet its requirements, Chitundu said.