admin
The proposed Batoka Gorge hydro project, which will supply power to Zambia and Zimbabwe, may reach a financial-investment decision next year that may result in the listing of special-purpose vehicles in each country, an African Development Bank official said.
“We are hoping for financial close at the end of 2018, but all will depend on the environmental studies that are delicate to mitigate,” Amadou Hott, vice president for power, energy, climate and green growth at the Abidjan-based lender, said in an interview March 30 in Harare, the Zimbabwean capital.
The bank is adviser and lead arranger of funding for the 2 400-megawatt project, which will be located downstream from Victoria Falls on the Zambezi River that straddles the two countries.
Zimbabwe and Zambia will operate separate power plants at Batoka that will each cost $732 million to build, EY said in a report published earlier this month.
The estimated capital cost for the dam itself is $2,14 billion, and will be financed through senior debt and grants, it said.
Local populations will be able to invest equity and debt in the project, and subsequent special-purpose vehicles may trade on the nations’ stock exchanges, Hott said.
“The SPV in Zambia could be listed in Zambia and the SPV in Zimbabwe could be listed in Zimbabwe,” he said.
Batoka will help meet rising demand for electricity in Zambia and Zimbabwe, which is expected to more than double by 2035, according to EY, which is also an adviser on the project.
The two governments last year signed supply agreements with South Africa’s state-owned Eskom Holdings SOC Ltd to complement their existing capacity.
They plan to offer $440 million equity stakes in the hydropower plants.
Funding is being sought from foreign and domestic investors, Hott said.
“We do not want a transaction were a big sovereign guarantee is required because that will delay the project,” he said. – Bloomberg.
Peter Tanyanyiwa
Online Reporter