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Tuesday, 23 April 2013

Batoka Power Project, 2nd Edition

About 25 companies have expressed interest in the development of the 1,600 Megawatts (MW) Batoka Hydro power plant between Zambia and Zimbabwe. Zesco MD Cyprian Chitundu says of the 25 companies, two are local while the rest are from Brazil, China and Europe. The construction of the US$5 billion power project awaits review of a feasibility study which was done 20 years ago. The Government is having discussions with the World Bank to finance the renewal of the study and are hoping that this can be done by the end of the year so that the project can get underway.

The previous estimate for Batoka put it around $2.5bn, but now Chitundu is saying $5bn. In short, it is all guess work at present. I suppose the cost is of little consequence here given that this will be under the design, build and operate model. A private player will fund, build and operate it for some years and then transfer ownership some years down the line after it has recouped its investment. Zimbabwe and Zimbabwe will be buying power from the private player. It certainly speaks volumes that this appears oversubscribed! A great development.

Copyright © Zambian Economist 2013

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