Zambia, Zimbabwe to sell US$440m stakes in Batoka project

Source: Zambia, Zimbabwe to sell US$440m stakes in Batoka project | The Financial Gazette April 6, 2017

ZAMBIA and Zimbabwe plan on selling US$440 million in equity stakes in the hydropower plants that form the centrepiece of the proposed US$4 billion dam that will straddle their border.

This is according to a document published by Ernst & Young Advisory Services Pty Limited, the countries’ adviser. The Batoka Gorge hydropower project on the Zambezi River between the Kariba Dam and Victoria Falls will produce 2 400 megawatts of power once complete — more than either nation’s current generation capacity. The African Development Bank is also advising the governments on the project, which might start producing electricity from 2023.

Zimbabwe and Zambia will operate separate power plants at the dam that will each cost US$732 million to build, according to the report. That gives a total cost of US$1,46 billion. The estimated capital cost for the dam itself is US$2,14 billion, and will be financed through senior debt and grants, the report showed. While it didn’t detail the percentage stake the governments might sell in the power plants, it says they will be “jointly owned by private companies/investors and the respective power utilities.”

Batoka will produce power at an “average retail tariff” of 3,22 US cents per kilowatt-hour, about one-third of Zimbabwe’s average tariff in 2015-16, and almost half of Zambia’s, according to the report. — Bloomberg