AfDB approves US $150-million loan to support access to reliable electricity supply in Zambia
TUNIS, Tunisia, October 4, 2013/African Press Organization (APO)/ -- The Board of Directors of the African Development Bank (AfDB) (http://www.afdb.org) approved on Wednesday, October 2 a senior loan of up to US $150 million to finance a 300MW coal-fired power plant as well as the revamping of the Maamba coal mine in Maamba, Zambia. The project aims to tackle a severe environmental concern at the mine caused by the unregulated and spontaneous self-combustion of tons of currently unused low-grade coal while producing much-needed electricity for the country and the region.
The Maamba power plant project will increase supply and reliability of electricity in Zambia which is currently experiencing black-outs and is heavily reliant on drought-sensitive hydro power. Zambia's hydro power production accounts for 96% of total production, which exposes the country to severe economic risks in case of drought. By capitalizing on readily available low-grade coal resources, and diversifying away from hydropower, the project thus serves as a good example of mitigation and adaptation to climatic changes in the region. The power plant will use well-proven and advanced technology featuring high combustion efficiency and reduced GHG emissions for a lower overall environmental footprint.
The project is being developed by Maamba Collieries Limited, a company incorporated in Zambia in 1971 and privatized in 2010 through a joint venture between Nava Bharat Singapore Pte Limited (NBS) and Zambia Consolidated Copper Mines (ZCCM), a public investments holding company.
As the transaction's co-mandated lead arranger (MLA) alongside Absa Capital, a commercial bank from South Africa, AfDB is playing a leading role in mobilizing capital from development finance institutions (DFIs) and commercial financiers, and coordinating the due diligence process for the US $800-million project.
Following the Board's approval, AfDB's Division Manager for Infrastructure Finance, Tas Anvaripour said, “After the approval of the Ithezi Thezi hydropower project in 2012, I am delighted to reaffirm the African Development Bank's commitment to support Zambia's power sector as it embarks onto the path of energy source diversification and resilience in an increasingly climate change-sensitive environment. By capitalizing on readily available low-grade coal resources that are otherwise left to self-combust in the open air and inflict an environmental burden on the entire Maamba area, the project will produce much-needed power for households, businesses, and Government, while remediating a long-standing environmental concern.”
Distributed by the African Press Organization on behalf of the African Development Bank (AfDB).
Tas Anvaripour, Head of Infrastructure Finance / t.anvaripour @afdb.org
About the African Development Bank Group
The African Development Bank Group (AfDB) (http://www.afdb.org) is Africa's premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 34 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 53 regional member states.
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