Transmission links to neighbouring nations will boost power exports
| State-owned power utility ZESCO is undergoing a process of commercialisation |
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lessed with rich hydropower resources that enable it to generate electricity at far lower cost than its neighbours, Zambia is ideally placed to become a leading provider of electrical energy to the region. Surrounded by eight other countries, all with an increasing need for power, Zambia can sell it to them directly without having to go through an intermediate country.
“Alternatively, we can buy from one side and sell to the other side,” says Rhodine Sisala, Managing Director of Zambia Electricity Supply Corporation (ZESCO). “We have become a hub in terms of power trading.”
ZESCO already exports electrical energy to South Africa, Zimbabwe, Botswana and the Democratic Republic of Congo, and the government sees plenty of scope for expansion. George W. Mpombo, Minister of Energy and Water Development, says: “We are trying to ensure that the potential of the energy sector is exploited to the fullest. At the moment, we are earning £222.4 million in power exports but we can earn a lot more.”
Export will be boosted when a new £6.6 million power transmission line to neighbouring Namibia is completed next year. Power exports to Kenya and Tanzania are scheduled to start in 2006 following the signing of a memorandum of understanding with their governments in March, and plans to link the power grids of Kenya, Tanzania and Zambia are at an advanced stage.
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ZESCO recently signed a memorandum of understanding with Farab International of Iran for the building of the £83 million Itezhi-tezhi hydropower plant on the Kafue River, which will have a generating capacity of 120 megawatts. Discussions are also being held with a Chinese firm on the building of a even bigger power plant at the Lower Kafue Gorge, at a cost of £334 million. “This will be the biggest ever project in Zambia,” says Mr Mpombo. “It will bring on board an extra 1,200 megawatts.”
Mr Sisala believes that over the next four or five years Zambia will double its generation capacity from 1,700 megawatts to 3,500 or 4,000 megawatts and that within 10 years it will double it again.
Zambia’s own energy requirements are rising as the economy expands and an influx of investment boosts sectors such as agriculture, mining and tourism. Meanwhile, only 22 percent of Zambia’s total population has access to electricity – only 2 percent in rural areas.
Zambia’s Rural Electrification Programme aims to electrify 50 percent of the country’s rural areas by 2010, at a cost of around £111 million. A number of small hydro plants are being built in the east, northwest and west of the country, and various alternative technologies are being investigated, such as solar and biomass.
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Mr Sisala argues that extending electrification across the country lays the foundations for development that will ultimately work to ZESCO’s advantage. “We know that the rural areas are going to be profitable market segments in five to 10 years time,” he says.
ZESCO, which is involved in power generation, transmission, distribution and supply, is currently undergoing a process of commercialisation. Progress has been made by cleaning up the balance sheet, securing prompt payments and dismantling the company’s historic debt. “The idea is to transform a conventional electricity utility into a profitable organisation, which provides satisfactory service to its customers,” says Mr Sisala.
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