Project ID: 66848

Sinohydro provides $29 million supplier's credit for Musonda Falls Hydroelectric Power Plant Upgrading Project (Linked to Project ID#57560, #57565)

Commitment amount

$ 34243330.74239555

Adjusted commitment amount

$ 34243330.74

Constant 2021 USD

Summary

Funding agency [Type]

SinoHydro [State-owned Company]

Recipient

Zambia

Sector

Energy (Code: 230)

Flow type

Loan

Level of public liability

Other public sector debt

Infrastructure

Yes

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

2016-10-17

Geography

Description

According to the ZESCO 2016 Integrated Report (p. 86), on October 17, 2016, Sinohydro Corporation Ltd. and ZESCO Ltd. signed a $29 million USD bridge loan facility for the Musonda Falls Hydroelectric Power Plant Upgrading Project. This supplier's credit loan carried a 7% interest rate. The maturity was from the date when the loan agreement came into effect (October 17, 2016) until the date when funds became available to ZESCO Limited from a financial institution. ZESCO obtained financing from ICBC on January 26, 2017 (project #57560). Principal and interest was repaid immediately after ZESCO and ICBC signed the loan agreement. Therefore, the Sinohydro supplier's credit loan maturity was approximately 3 months or 0.25 years. In 2017, the balance stood at $16.9 million USD. It is unclear whether the full $29 million USD was drawn down. The Musonda Falls Hydroelectric Power Plant is located in Musonda Falls within Mwense District and Luapula Province. It is a source of power supply to seven districts in the province—namely, Chiengi, Kawambwa, Mwense, Chipili, Chembe, Nchelenge and Samfya. The purpose of this project was to upgrade the Musonda Falls Hydroelectric Power Plant from 5MW to 10MW. This increase in local power capacity also added to the national grid capacity, thereby supporting the fishing industry, farming activities and potential mining activities in nearby communities. In 2015, Sinohydro won the 18-month contract for project implementation. Sinohydro had previously provided another bridging loan in 2015 (see project #57565) for the same project. As of 2017, this project had achieved a 99% completion rate. Turbine-Generator Units 6 and 7 had completed their commissioning tests and reliability runs, but commissioning tests and reliability runs for Turbine-Generator Units 1 to 5 were still ongoing by the end of 2017. The scheduled project handover date of November 18, 2017 was not achieved. However, a 2018 Energy Sector Report published by Zambia’s Energy Regulation Board (ERG) indicates that ‘[t]he increase in [power] generation in 2018 is attributed to the [upgrading] of Musonda Falls Power Station’, which suggests that this hydroelectric power plant project was completed and put into operation in 2018.

Additional details

1. The Chinese project title is 穆松达水电站7台机组 共10MW.

Number of official sources

3

Number of total sources

3

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Details

Cofinanced

No

Direct receiving agencies [Type]

Zambia Electricity Supply Corp. (ZESCO) [State-owned Company]

Implementing agencies [Type]

Zambia Electricity Supply Corp. (ZESCO) [State-owned Company]

SinoHydro [State-owned Company]

Loan Details

Maturity

0 years

Interest rate

7.0%

Grace period

0 years

Grant element (OECD Grant-Equiv)

0.2178%

Bilateral loan

Investment project loan

Short-term loan

Supplier's credit/Export seller's credit