Page 5 - AfrElec Week 28

AfrElec COMMENTARY AfrElec
actual available capacity is only 1,500MW. e World Bank predicts that demand will expand to 4,000MW by 2030.
The poor rainfall mentioned by the ZRA in its statement means that water levels at the Kariba reservoir, which is downstream of the proposed Batoka site, are just 27% of seasonal norms, almost bringing generation to a halt at the Kariba North (Zambia) and South (Zimba- bwe) HPPs.
Meanwhile, Zimbabwe is a ected by power cuts of up to 19 hours per day, while in Zambia they are limited to around ve hours.
This means that the Batoka project is urgently needed, pushing both governments to take this emergency decision.
Other concerns include land ownership, local environmental opposition and concerns about the dam’s e ects on tourism. e nearby Victoria Falls, which will be 50 km upstream from the hydro site, is a UNESCO World Herit- age Site, and the required 1-km-long, 26-square km reservoir could have an adverse e ect on water ows and the wider tourist industry.
Chinese strategy
Elsewhere in Zambia’s hydro sector, China’s Sinohydro is due to complete construction of the 750MWKafueGorgeLowerHPP,located60km south of Lusaka on the Kafue river, in 2020, Zambian Finance Minister Matthew Nkhuwa said on July 14.
e $2bn project is being nanced by Exim Bank of China, the Industrial and Commercial Bank of China and by a small equity contribu- tion from the Zambian government.
It is expected to ll Zambia’s current demand gap and to help the country regain its previous status as a regional power exporter.
In Zimbabwe, Sinohydro is adding 600MW to the Hwange thermal power plant (TPP) at a cost of $1.5bn and 300MW to the Kariba South HPP at a cost of $533mn.
Indeed, Chinese commitment to power investment in sub-Saharan Africa has brought investment capital to the region, but at the risk of high rates of indebtedness. China said in 2018 it aimed to make $60bn of new investment and loans available to Africa.
However, Zambia now owes one-third of its $10.05bn debt – over 60% of GDP – to China, its single biggest creditor, the government said in March.
Meanwhile, a recent study from the Interna- tional Energy Agency (IEA) forecasts that Chi- nese construction companies will add 9GW to African power capacity between 2014 and 2024, of which 4.5GW are currently still being built.
Of this, 5,764MW will be hydro, 811MW coal, 988MW gas and 370MW oil. Just 1,178MW will be renewables.
Zambia is a leading recipient of Beijing’s capital and expertise, using Chinese building contractors to construct the bulk of capacity between 2014 and 2024, followed by Nigeria, Angola, Uganda and Côte d’Ivoire. ese ve make up roughly half of the IEA’s total of 9GW.
China’s power investment is dominated by hydro, although the picture is more nuanced, with renewables now attracting more cash and all forms of generating fuel being supported.
Flagship hydro projects underway include the Kafue Gorge project, the 2,160MW Cacula dam in Angola and the 3,048MW Mambila dam in Nigeria. To this list we can now add Batoka Gorge.
However, the IEA report shows that total Chinese capacity additions are slowing slightly, from 12GW between 2010 and 2020 to 9GW between 2014 and 2024. China’s share of total capacity additions declined from 30% to 20% between the two timeframes.
Other concerns
Many details remain to be worked out before financial closure is reached, such as a formal development contract and a supply agreement with the two grid companies.
A key issue will be the o -take cost of the power. e two countries have some of the lower power tari s in Africa.
e key nancial concern is heaping more Chinese debt on to the country’s balance sheet. Although the involvement of GE, the World Bank and the AfDB may add some transpar- ency to the funding model, the two countries are only adding to their problems of debt-trap diplomacy.™
The nearby Victoria Falls, which will be 50 km upstream from the hydro site, is a UNESCO World Heritage Site
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