Zambia, Zimbabwe Pick AfDB Advisers for $4 Billion Batoka Plant

HARARE, Capital Markets in Africa: Zambia and Zimbabwe have appointed the African Development Bank as lead financial advisers for the construction of the 2,400-megawatt Batoka Gorge hydro-power project that’s expected to cost $4 billion, an official said.

The two southern African nations face severe power shortages as years of under-investment are amplified by low water levels at the Kariba dam hydro-power station that they each rely on for about half of total supplies.

“Only yesterday, we were talking to the AfDB after Zambian and Zimbabwean governments appointed them as the lead financial arranger on this project,” Munyaradzi Munodawafa, Chief Executive Officer of Zambezi River Authority, said Tuesday in Victoria Falls after touring Batoka Gorge. 

The authority intends to build it on the same arrangement as the Kariba Dam was built, which involves loans, grants, with the two governments also funding it, he said.

Executives from both nations have been to Beijing and met officials from the China Export & Credit Insurance Corp, known as Sinosure,Export-Import Bank of China, contractors and individual financiers, Munodawafa said. Officials were also in France where there was “good reception and a lot of interest” during meetings with representatives from BNP Paribas SA,Societe General SA, the European Investment Bank, he said. In South Africa, there were talks with DBS Holdings Ltd., Barclays Africa Group Ltd., the International Finance Corp. and a consortium of local investors.

Financial mobilization for the project is scheduled to start in 2018, but could begin earlier than that, he said. The dam will have a capacity of 1.2 billion cubic meters of water on completion. Kariba, the world’s biggest man-made reservoir by volume, holds 181 billion cubic meters of water.

“After we have completed Batoka Gorge, we will start planning for something at Devil’s Gorge,” Munodawafa said of the valley that’s further upstream on the Zambezi River. “This is still a plan.”