China CITIC Bank provides $8 million loan for Phase I of Fiber Optic Cable Project (Linked to Project ID#57579)

In 2005, ZTE Corporation and Zambia Electricity Supply Corporation (ZESCO) Limited -- a state-owned electricity company in Zambia -- signed an implementation contract for Phase I of the Fiber Optic Cable Project. Phase I cost $10.7 million and was partially financed by an $8 million loan from China CITIC Bank in 2005 (as captured via Project ID#243). The borrowing terms of the loan are unknown. The rest of the Phase I project cost ($2.7 million) was paid directly by ZESCO to the contractor (ZTE Corporation) as an advance payment. Then, on June 30, 2010, ZTE Corporation and ZESCO signed another contract for Phase II of the Fiber Optic Cable Project. Phase II was originally anticipated to cost $43.9 million. ZESCO Limited made an advance payment of about $6.9 million to ZTE for Phase II. It was initially envisaged that the remaining cost of Phase II ($37 million) would be financed with a loan from the Bank of China (BOC). However the cost of Phase II increased, so on May 20, 2011, BOC and ZESCO signed a $48.4 million loan agreement. The loan carried the following borrowing terms: a 8-year maturity, a 2-year grace period, and a 3.414% interest rate (LIBOR plus 300 basis points) per annum. As of December 31, 2017, the loan's amount outstanding was $12.1 million. The Fiber Optic Cable Project involved the laying of a 5300 km fiber optic cable network covering 46 districts in Zambia and two international connections to Namibia and Tanzania. Phase I involved the laying of 1700 km of fiber optic cable in six provinces and 15 districts. More specifically, it ran from Sesheke to Livingstone, Choma, Mazabuka, Lusaka, Kabwe, Kapiri Mposhi, Kitwe, Solwezi and Lumwana; and from Lusaka to Kariba and Kafue Gorge Power stations. It was implemented between 2006 and 2008. Phase II involved the laying of 2,600 km of fiber optic cable and it sought to connect the Western, Luapula, Northern and Eastern provincial centers. It ran from rom Kabwe to Mkushi, Chinsali, Isoka and Nakonde; Serenje to Chipata and Katete; Mpika to Kasama, Luwingu, Mansa and Kawambwa; Ndola and finally Sesheke to Mongu. Its official commencement date was February 22, 2013. Its precise date of completion is unknown. The project was originally scheduled to reach completion in November 2017.

Additional details

1. This project is also known as the Optic Fibre Cable Project or Fibrecom Network Construction Project. The Chinese project title is 光纤网络建设第一期扩建项目. 2. Phase III extended the network by a further 900 km to Mbala, Mpulungu, Petauke, Mfuwe, Siavonga, Kalabo, Kasempa, Mpongwe and Kaoma. It was implemented without financial support from Chinese state-owned banks and it was completed in January 2017.

Number of official sources

5

Number of total sources

11