Zambia pulls out of U$5 billion Batoka project

Zambia has pulled out of the deal to co-build a 2400- megawatts (MW) hydroelectric plant with Zimbabwe along the Zambezi River at Batoka Gorge, according to media reports.

Proper procurement methods weren’t followed when the deal was struck, Peter Kapala, Zambia’s energy minister, told the state-owned Zambia National Broadcasting Corporation last week.

The Zambezi River Authority, an agency jointly owned by Zimbabwe and Zambia contracted General Electric and PowerChina to build the power plant at Batoka Gorge at costs of US$5 billion.

“We are disengaging from that contract and we hope to re-advertise it and revisit everything that was agreed to before,” said Kapala. “Mainly, it was because of the cost, it was just too much.”

Calls seeking comment from Zimbabwe’s Energy and Power Development Minister Zhemu Soda were not answered.

Kapala also said the; “latest information is that the hydrology of Zambezi might not favour the establishment of a 2,400-megawatt hydro-plant.” “We could reach that if maybe we do a hybrid of solar and hydro itself, but the indications are that we could be looking at far much less than the 2,400, it could be maybe even 1,000 megawatts.”

Zimbabwe and Zambia generate electricity at Kariba Dam, but production has often been disrupted as a result of low water shortages.

GE and PowerChina won the tender to build the power plant ahead of Salini Impregilo of Italy, a joint venture of Chinese firms Three Gorges Corporation, China International, Water Electric Corporation and China Gezhouba Group Company Ltd.

The project was to be implemented under a Build-Operate-Transfer financing model.

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