Announcement of World Bank to Provide Assistance for Developing Energy Sector in Zambia on May 24, 1982

'FOR IMMEDIATE RELEASE IeWarld Bank 1818 H Street, N.W.,Washington, D.C. 20433, U.SA• Telephone: {202) 477-1234 BANK NEWS RELEASE NO. 82/96 Contact: Pushpa Schwartz May 24, 1982 (202) 477-5306 WORLD BANK TO PROVIDE ASSISTANCE FOR DEVELOPING ENERGY SECTOR IN ZAMBIA The World Bank will provide assistance to Zambia for developing its energy sector. Two World Bank loans amounting to $11.7 million will help finance projects for surveying the country's geology for structures f~vorable to hydrocarbon genera- tion and for preparing a techno-economic study of possible modification of its refinery facilities~ Petroleum Exploration Promotion Project A $6.6 million WorJd Bank loan will support the Zambian government's first effort to survey its sedi~entary ba~ins for structures that may have accumulated hydrocarbons, at an .estimated cost d'f $8 million. With the help of consultants to be provided with Bank assistance, the government's Geological Survey Department will conduct geophysical surveys and interpret the geological data. •• The information obtained will be used to attract oil companies into exploration in the areas surveyed. The geophysical surveys will include an aeromagnetic survey flown over the prospective Karroo areas, and coveiing·about 90,000 line-kilometers, and a gravity survey of about 1,500 stations. Consultant services will be provided for super~ision and quality control and interpretation of the results of the aeromagnetic survey. Part of the World Bank loan will be used to reprocess and reinterpret data collected ·under five previous mineral aeromagijetic surveys covering about 50,000 line-kilometers over part of the Katanga Group sediment areas. To carry out the petroleum ~xploration promotion project, a petroleum unit has been established in the Geological Survey Department in the Ministry of Mines. Legal consultant services will be provided to draft 1egisl-~ion concerning petroleum exploration and prepare model contracts as well as to assist the Zambian government in negotiating with oil companies. Refinery Modification Engineering Project The World Bank's other loan to Zambia, of $5.1 million, will go to support the INDENI refinery modification engineering ·project, which is estimated to cost $5• 8 mi 11 i on • ;. NOTE: Money figures are expressed in U.S. dollar equivalents.  - 2 - The INDEN I refinery came on st re.~rn in Apr i 1 1973 and has a capac i ty of • 25,000 barre 1s per stream day or aboul 1. 1 mi 11 ion metric tons a year. It is designed to process Arabian light c~ude oil with the flexibility of spiking (mixing) the crude feed with naphtha, kerosene, and diesel oil up to 25% of the feed. The spiking of expensive refined products is now approaching technically unacceptable levels, raising the economic cost of petroleum products to the country. The refinery modification project will provide engineering services to \ determine the most appropriate process for ensuring the refinery's ability to ' ,/ meet the demands of the market. The project will also take into account Zambia's potential for using excess capacity in the refinery to meet the requirements of neighboring Zimbabwe, Malawi, and Botswana, which· have no, operating refineries. The World Bank loans are for 20 years, including five years of grace, with interest at 11.6% a year. The loans also carry annual commitment charges of 0.75% on undisbursed balances and include a front-end fee of 1.5% on the amount of the loans. - 0 - • ..· \ •