ZIMBABWE and Zambia will have to raise at least US$2 billion to finance the construction of the Batoka hydro-electric power plant on their common border along the Zambezi River, businessd
iest can reveal.
The project, on the cards for over a decade, is expected to start before the second quarter of next year, funds permitting.
Zimbabwe is particularly keen to have the Batoka project running as soon as possible, given the envisaged power deficit in the region in two years’ time.
Sources this week said Zimbabwe has to fork out at least US$1 billion to finance construction of the new power plant.
Energy ministry officials privy to the Batoka project said obtaining finance would not be easy given the political risk associated with dealing with Zimbabwe. They said it was going to be difficult to get grants from the European Union, which could force government to turn to the Far East.
They said the Infrastructure Development Bank of Zimbabwe was also expected to play a critical role in raising funds for the project.
Batoka Gorge is located along the Zambezi River, upstream of Kariba Dam. Preliminary meetings have been held between representatives of the two governments.
The project is meant to assist the two countries to increase their power-generating capacity ahead of critical power shortages expected to hit the Southern African Development Community (Sadc) in 2007.
Energy minister, Mike Nyambuya, could not be reached for comment this week, but his permanent secretary, Justin Mupamhanga, confirmed that there was progress on the Batoka project.
He said Zimbabwe and Zambia were working on budgets but refused to shed light on the actual costs.
Zimbabwe faces a severe foreign currency shortage and is expected to earn only US$1,8 billion this year. But much of that is expected to go towards fuel, drugs and power imports in addition to food.
“All I can say is that the governments of Zimbabwe and Zambia are working on that project,” Mupamhanga said.
“Our government and that of Zambia are very keen to have the Batoka project start. But there are a lot of issues which have to be drawn up by the technical committees.” Mupamhanga said there were already “working estimates which have been brought up but I cannot say anything on that one (US$2 billion cost)”.
No comment could be obtained from the Zambian embassy as the staffer handling the Batoka project was said to be on sick leave and expected in the office next week.