Mining is poised to receive a spinoff benefit from Monday’s announcement that the power grid in Zambia is to be boosted by a $60-million investment. In this latest transaction, Standard Chartered bank has partnered with the United States Agency for International Development (USAID) to provide a long-term loan to the State-owned Zambia Electricity Supply Corporation (Zesco).
The loan has been described as one of the largest facilities that USAID has delivered within President Barack Obama’s ‘Power Africa’ partnership since the campaign was launched in 2013. The loan will finance capital expenditure tor Zesco’s Lusaka transmission and distribution rehabilitation project as well as provide bridge financing to facilitate new connections to the grid. Standard Chartered Zambia CEO Andrew Okai described the latest loan as having both the “longest tenure and largest facility provided to a Zambian parastatal entity to date” and USAID/Zambia mission director Michael Yates said the latest funding would meet a critical need for a quarter of a million Zambians and the economy as a whole.
Zesco MD Victor Mundende noted that support from USAID and Standard Chartered had already resulted in more than 15 000 new power connections being established across the organisation’s 39 000 km of power transmission and distribution lines. Standard Chartered corporate and institutional banking division CEO Simon Cooper made the point that Africa accounted for around a sixth of the world’s population, but generated only 4% of its electricity. He pledged continued bank support for infrastructure development that provided a solid platform for long-term economic growth. Earlier this year, International Growth Centre country economist Miljan Sladoje pointed out in an article that daily power cuts were hurting vital sectors of the economy in Zambia, which needed to diversify away from overdependence on hydropower, the main source of electricity in Africa’s second-biggest copper producing country.
Ninety-nine per cent of Zesco’s installed capacity of 2 224 MW is from hydropower and 1% from diesel. After drought curtailed hydro generation, Zambia has been rationing electricity, which has resulted in reduced mine production, lower government revenue and job shedding. The Kariba dam, one of the main sources of the water-based power, is reportedly only 26% full, compared with 48% this time last year, while fuel subsidies and emergency power imports are reportedly costing Zambia a fortune.
Zambian President Edgar Lungu last week expressed the government’s keenness to diversify the power generation mix by promoting renewable energy and implementing the World Bank’s initiative of scaling up solar power capacity in the country to 600 MW. Currently active in more than 100 countries, USAID works to end extreme global poverty and enable democratic societies to realise their potential. The goals of the ‘Power Africa’ programme are to add more than 30 000 MW of cleaner, more efficient
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