The African Development Bank has been appointed lead financial adviser for the planned US$5 billion Batoka Gorge hydropower dam, designed to supply Zambia and Zimbabwe that are facing crippling power outages, according to the executive leading the project.
As financing costs rise, the bank has been tasked with finding an attractive model for funders, Munyaradzi Munodawafa, chief executive officer of the Zambezi River Authority, said in an interview.
Harnessing the Zambezi river that separates the two countries, the 2 400-megawatt station — if realised — would end persistent power shortages that stifle economic growth, he said.
Construction of the 181-meter dam wall and power plants at Batoka Gorge had been expected to start three years ago.
The region is in the midst of an energy crisis, with water levels at the Kariba dam plunging to the lowest point in more than three decades last month.
The two countries rely on that reservoir’s 2 130 megawatts of hydropower capacity for the bulk of their electricity.
Sovereign defaults by Zambia and Zimbabwe have escalated the project cost by an estimated 23 percent to nearly US$5 billion, Mr Munodawafa said.
Macroeconomic factors have also contributed to the higher price. “With the market trends and inflationary issues worldwide, the prices don’t stagnate they still go up,” he said. No estimated start date is available due to ongoing discussions.
In 2019, the Zambezi River Authority, which manages the project on behalf of the governments, announced that General Electric Co and Power Construction Corp of China Ltd. would be the joint developers.
Mozambique last year appointed AfDB as financial advisers for the Mphanda Nkuwa hydropower project downstream the Zambezi river.
That US$4,5 billion plan that includes a 1 500-megawatt hydroelectric dam and transmission system is scheduled for financial close by the end of next year, commissioning in 2031.- Bloomberg