Announcement of One Hundred Fifteen Million US Dollars Loan for the Kafue Hydroelectric Project in Zambia on July 9, 1973

AL BANl~ FOR ,·, \. • 1818 H STREET, N.W., WASHINGTON \L, IOI'~ AND D. C. 20433 TELEi::HoNE: 'EXECUTIVE 3-6360 Bank Press Release No.. 73/53 Subject: $115 million loan for the Ka.fue July 9·, 1973. hydroelectric project in Zambia A World Bank loan equivalent to $.1.15 million· ~11 assist the Zambia Electricity :,. Supply Corporation (ZESCO) in financing the second stage of a hydroelectric p;roject on (( ' the Kafue River. · The Kafue, a tributary of the Zambesi River. bas a high hydroelectric power poten- tial. The first stage of develop,;nent, consis·~i!lg of a dam at Ka.rue Gorge with a 600- megawatt power station, was .completed in April 1972. The second stage inc,ludes the addition of 300 MW of capa~i ty at the Kafue power station, ··the construction of a storage dam 155 miles., upstream, and transmission facilities. . Zambia's econOJI\Y is dominated by copper mining which contributes over 90% of the country's foreign exchange earnings. The copper in'ciustry consumes most of Zambia's electricity, though consumption by manufacturing industries in_ Zambia is increasing rapidly. c>l'h.e --principal cities, ingus trial centers and ·the majority of tO'\r..-"IlS along the line-of-rail from Livingstone in the soutiL to· the Copperbelt in the no~th are being sup- plied with power and others are being progressively linked to the power grid. The project will supply power to the Central African Power Corporation's (CAPC) interconnected system •. Genera.ting capacity of that system is presently aKA1t 1,884 MW. --It is estimated that this will be adequate until completion, expected in 1975, of the 600-MW Ka.riba North project on the Zambian side of the Za.mbesi River •.. Bank lending has been a major factor in developing the power sector in Zambia. · The first loan was ma.de in 1956 for the Kariba dam and the adjacent South Bank power station on the Zambesi River, and the interconnected 330-kilovolt transmission system. · A second loan was, ma.de in 1964 for an extension of the transmission system and a third was made in 1970 for the Kariba North project. The second .stage of the Kafue River hydroelectric project, for which today's loan is beinr; made, was prepared by the Government of Zambia and ZESCO with the assistance of.,Swedish consultants. The storage dam, to be built at Itezhi Tezhi on the Ka.rue River, will be a rock and earthfill dam 4,900 feet long and 180 feet 0 maximum height above riverbed. Two 150-MW generating units will be installed at the Kafue power station loc-ated 1.55 miles downstream from the storage dam. A 37.i,mile, 330-kv single circuit transmission line will be constructed to connect the Kafue power station to the CAPC grid at Ka.rue town. The project will increase the firm energy of the Ka.fue powe:,;- station which px-esently operates with little water storage. The project is the most economical source of additional power to meet Zambia's requirements. Furthermore, it is complementary to investments in additional mining capaciti that are necessary to increase Zambia's foreign exchang&.,earnings, govern- ment revenue and employment. , The cost of the project is estimated at the equivalent of $137.7 million, plus interest during construction of $26.4 million. The Bank loan of $115 million will finance the foreign exchange costs~ The loan will be made to the Zambia Electricity Supply Corporation and will be guaranteed by the Republic of Zambia. It will be for a term of 25 years, including 9-~ years of grace, and bear interest at the rate of ,,,~ per annum. -1 } Note: Money figures are expressed in U.S. dollar equivalents. - 0 -  • July 9, ~973 i'' .r .• TECHNICAL DATA () PROJEC't: ICa,fue Hyd roe lee tr ic Project 0 COUNTRY: Th• Republic 0£ Zambia Jl // TOTAL ·cost: $137.7 million equivatent, plus interest during construction of $26.4 million • BANK PINANCING: . $115 million equivalent, 25 years iric luding 5\ years .of grace, int'era·st 7.\1 per annum. OTHER FINANCING: Government, $40. r million equivalent-. - ·-- --- ·-- Zambia Electricity ,,Supply Corporation (ZESCO), $9 million equivalent. · 0 f ~2 ' PROJECT DESCllIPl'ION:- T.·he project consists. of a storage dam acr. os~::tlie Kaf~e River at ., •. Itezhi Tezhi and a 300-MW ex,;ension of the Kafue power station located 155 miles do~n•tream. Th·e main feature s of the project ~re: (l}" a rock and earthf'ill 1 dam, 4,900 feet 'bl length, and 180 feet maximum height above ri ve.rbed~;, (2) ,:two diversion tunnel• in rock~' each with a c~oss sectiopal area of 19,0(fu2 and \a ,len~th pf 1,633· ~eet, incorpo.rating regulating structures and gate/~; (3) . a concrete chute spillway with tn~e~\ radial gates; .(4) two,, 150-MW generatin~. unite at Kafue power statj.on with 'ancillary civil works and switchyard ex// . ,' . . ' ~ te11dons; and (5) a ,i330-kv single circuit transmission line, 37 miles in length, connecting the Kaf~.i'e 'P,~~et sta·tion to the Kafue town grid substation. ' ,)' \\ ,/;c-~cc,":... IMPLEMENTING ORG~IZATION: Zambia Elect~icity SuP-ply Corporati·~\ Lusaka,. ZaD,!lfla, Pl\OCUUMENT: Procurement will be on the bas~s of inter-national c1~petitive bidding, ex~ept for iteu involving expenditures of less than $20,000~\~ These exempted item• will be procured on the basfs of government,. t~ndering) procedures. A 1si pfeference margin will be accorded to local suppliers of <e4\1ipment. CONSULTANTS: The Swedish Contlulting GroU,p (SWECO), which a~sisted the Governnient and ZESCO in the pr•paiation of the··, project, wHl supervise its constructio~. EST tit:AtED COMPLETION 6 I?ATE : 19 7 7 . II • 0