Zambia’s economy has been growing consistently over recent years, but the country faces some significant macroeconomic challenges. The fall in revenues stemming from poor agricultural and copper exports has put a strain on public finances, but the overall economy is still expected to grow during the upcoming years. The deficit in power production from the current system has become a major political issue and GDP growth has for the last couple of years been constrained by the load shedding and power cuts.
The “Mutinondo and Luchenene Hydropower Project” consists of the development of two facilities on the rivers of these names, with an expected total installed capacity of 77 MW. The project is located near Mpika in the north of Zambia, and will contribute to improvements in the region, providing capacity and stability to the grid and enabling local communities to expand their economic activities. The project will have the potential to create multiplier effects in the local economy e.g. due to availability of electric power and potentially large scale irrigation agriculture, technological transfer as those employed are trained and acquire new skills.
eleQtra is developing the project on behalf of InfraCo Africa, which was invited to join the project by the local sponsors Powermin Ltd.
Primary Economic Benefits
- Support the Government of Zambia’s policy of increasing installed capacity in the country in order to eliminate the power deficit, support increased economic growth and access to electricity, and potentially provide a source of export earnings.
- Contribute to the development of the province through jobs, economic development, and where possible direct community development benefits to be explored during the project’s development process.
- Further diversify Zambia’s hydropower generation away from the main generation hydropower plants on the Zambezi River, and contribute to the Government’s overall priority of establishing new electricity generation capacity in the country.
Primary Social Benefits
- Employment creation in the local community during the construction and operation period, in addition to some jobs to be created during the development period.
- The project will deliver reasonably priced energy to a growing region which currently has low access to electricity.
- In addition it will generate “green power” in line with the international agreements aimed at combating climate change such as the Paris Agreement at COP in 2015.
- The Project will be developed as an Independent Power Producer (IPP) project with an offtake contract expected to be negotiated with the national power utility, ZESCO.
- The construction will be awarded via a turnkey EPC contract.
- eleQtra is developing the project on behalf of InfraCo Africa along with a local partner, who together intend to arrange financing for construction of the project – most likely a project finance arrangement with development finance institutions and private equity partners.
- Increased supply of power will facilitate economic development and poverty reduction.
- The project will play a major role in establishing new power projects in northern Zambia and stimulating further investment in the sector over the coming years.
Mutinondo & Luchenene Hydropower
Sponsoring government ministries
Rights are granted by the Ministry of Energy and Water Development (MEWD)
Approximate scope of project
Up to 77MW of hydropower generation on the Mutinondo and Luchenene rivers
Overall project costs estimated to be c. $200m.
Local partner: Powermin Limited
Developer In Charge