China Eximbank provides $44.2 million USD preferential buyer’s credit for 14.8 MW Lunzua Hydropower Rehabilitation Project (Linked to #57392)

On 31 July 2009, China National Electrical Engineering Company (CNEEC) and the Government of Zambia signed a Letter of Intent for the purpose of negotiating the possibility of CNEEC working with ZESCO Ltd. to develop the 86MW Lusiwasi Lower Hydropower Expansion Project & Lunzua Hydropower Rehabilitation Project (#30467). In exchange for hiring CNEEC, the Government of Zambia requested that China Eximbank extend a preferential buyer’s credit (PBC) loan for both projects with CNEEC mandated to arrange for the financing.In 2013, China Eximbank and the Government of Zambia signed the final $183.23 million USD PBC agreement for the 86MW Lusiwasi Lower Hydropower Expansion Project (#57392) & Lunzua Hydropower Rehabilitation Project. The PBC loan terms are unknown. According to a 2014 report from the Auditor General (source ID 67159), the proceeds from this PBC were used to fund 85% ($139,353,132 USD) of the total cost ($163,944,861.43 USD) of the 86MW Lusiwasi Lower Hydropower Expansion Project, as well as 85% ($44.2 million USD) of the total cost ($52 million USD) of the 14.8MW Lunzua Hydropower Rehabilitation Project. The Government of Zambia was responsible for counterpart funding the remaining 15% of both projects. The 14.8MW Lunzua Hydropower Rehabilitation Project involved involved the construction of a 14.8 MW hydro power plant along the Lunzua River, upstream of the existing 0.75 MW power plant. On 21 July 2011, ZESCO Ltd. entered into two contracts with CNEEC for the design, procurement and commission of both hydropower projects. This project was completed on April 9, 2015. Because CNEEC was selected as the contractor instead of awarded through a competitive bidding process, the Government of Zambia tried to cancel the contract. However, ZESCO convinced the Government that cancelling would be too costly, and re-instated CNEEC. More specifically, a 'no-objection' was granted as per China Eximbank's request.

Additional details

The Chinese project title is 伦佐水电站 or 赞比亚LUSIWASI和LUNZUA水电站合.

Number of official sources

12

Number of unofficial sources

5