Fresh details on the recently launched Chisamba […]

Fresh details on the recently launched Chisamba phase 2 100MW Solar project have revealed that ZESCO, Zambia’s national electricity utility contracted about 70% for the construction of the Chisamba Phase 2 Solar Project.

According to sources familiar to the case, the utility contracted 70% of the project’s K75 million cost as debt financing from ABSA Bank while ZESCO state owned utility contributed 30% as equity.

Speaking in an interview with the Zambian Business Times – ZBT, the Sources whose names have been withheld, revealed that, the 70-30 debt-to-equity structure has now become a common model for ZESCO as even the phase one 100MW solar project the same happened where ZESCO only provided 30% equity contribution.

This means ABSA provided approximately K52.5 million in debt, with the remaining only 30%, around K22.5 million, contributed by ZESCO as equity. Meanwhile, the source confirmed that Chisamba phase 2 100MW solar project and phase one project are two different projects operated and managed by different entities.

 The source noted that the phase 1 100MW was managed by Kariba North Bank Extension Power Corporation (KNBEPC) Limited a wholly owned subsidiary and special purpose vehicle of ZESCO while the phase 2 100MW was operated and managed by Kalungwishi Power Corporation. Responding to a ZBT query on the transition the source said the project represents a strategic shift from Phase 1, which was led by Kariba North Bank Power Corporation.

The transition to Kalungwishi Power Corporation for Phase 2 was a board-level decision intended to diversify the financing base and enhance project delivery. Meanwhile, when asked about the off takers of the power from phase 100MW, the source said all power generated from the plant will be sold to ZESCO and denied any other deal.

“The off-taker for the power generated by the Chisamba Phase 2 Solar Project is ZESCO. Kalungwishi Power Corporation will operate the plant and sell all generated electricity directly to ZESCO under a long-term agreement. In summary, ZESCO is the exclusive off-taker for this project.”

 By ZBT Analyst