Narrative
Full Description
Project narrative
On August 10, 2017, the Industrial and Commercial Bank of China (ICBC) signed a $22,160,000 term loan facility agreement with ZESCO Limited — a state-owned power company in Zambia — for the Chipata-Lundazi-Chama 132kV Transmission Project. The borrowing terms of the loan are unknown. The project scope involves the engineering, design, supply, installation, construction, testing, and commissioning of Chipata-Lundazi-Chama 132kV transmission project, which will support the Chipata West 330/132kV substation, Mwasemphangwe 132-66/33kV substation, Lundazi Main 132-66/33kV substation, Egichikeni 123-66/33kV substation, Chama Main 131-66/33kV substation, and Tembew, Emusa, Chasefu, Chanje, Mwimba, and Chikwa 33/0.4kV substations. In October 2022, Zambia’s Minister of Energy reported to Parliament that the substations in Lundazi, Chama, Mwasemphangwe and Egichikeni were under construction. The Minister of Energy also reported that the project’s geo-technical works and topographical surveys for the substations were complete. At that time, the Minister of Energy expected that civil works for all four substations would commence in mid-November 2022 and the project was a whole would be completed by the end of 2024.
Staff comments
1. This loan is not included in the SAIS-CARI database of Chinese loan commitments that was released in 2020 and re-released in 2021. 2. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 1.6874 years in 2017. AidData estimates the grace period of the ICBC loan for the Chipata-Lundazi-Chama 132kV Transmission Project by using this figure. See https://www.dropbox.com/scl/fi/iymnqwd205mvs5h8crtv8/DRS-May-2024-Extraction-Private-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=bi71wlqbrbnfienx75a7bq1g2&dl=0. 3. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 14.1282 years in 2017. AidData estimates the maturity of the ICBC loan for the Chipata-Lundazi-Chama 132kV Transmission Project by using this figure. See https://www.dropbox.com/scl/fi/iymnqwd205mvs5h8crtv8/DRS-May-2024-Extraction-Private-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=bi71wlqbrbnfienx75a7bq1g2&dl=0. 4. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 4.7455% in 2017. AidData estimates the interest rate of the ICBC loan for the Chipata-Lundazi-Chama 132kV Transmission Project by using this figure. See https://www.dropbox.com/scl/fi/iymnqwd205mvs5h8crtv8/DRS-May-2024-Extraction-Private-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=bi71wlqbrbnfienx75a7bq1g2&dl=0