Transmission Line Kafue-Livingstone - IRS

The project consists of the upgrading of the existing 341 km Kafue–Muzuma–Livingstone transmission line from 220 to 330 kilo voltage, including the upgrading of the two substations related to this line, and the construction of one new substation. The line interconnects the Victoria Falls hydro power station in the south-eastern part of the country to the load and production centres situated in the centre of Zambia. It forms part of a new regional north-south connection that interconnects the Zambian and Namibian networks, bypassing the congested, unreliable network of Zimbabwe.

The total project cost is estimated at USD 100m and will be co-financed by the EIB, the World Bank and by the project Promoter, the Zambia Electricity Supply Corporation, ZESCO. 

The Kafue–Muzuma–Livingstone line was built in the 1970s to allow easy and cost-efficient upgrading when load growth so requires. The project therefore benefits from already existing infrastructure, resulting in relatively low environmental impact and investment costs. The technology used in the project is proven. The project is a priority in the recently developed ZESCO’s Master plan.

The project is a standard upgrade project of the national and regional electricity backbone network. This upgrade has been made necessary and possible by the commissioning of the Caprivi Interconnector in 2010. The project enables the utilisation of this interconnector closer to its nominal capacity of 300 MW. The Kafue-Livingstone line is the only significant transmission line towards the south-west of Zambia, and the upgrade works require an outage of several months. The Caprivi Interconnector provides the network connection to this south-western part of the country during the upgrade works, thereby making the upgrade possible. The possibilities of electricity trade through the Caprivi link make the upgrade necessary. 

The ITF is supporting this project with a total grant of EUR 5.55m split in two different operations: 

• An interest rate subsidy of up to EUR 5.2m subsidising EIB’s loan to the Republic of Zambia, who will on-lend the funds to ZESCO.  EIB’s loan will support the Zambian Government in its efforts to ensure that a reliable supply of energy will keep pace with the anticipated growth of the economy in the country and the region.  EIB also plays an important strategic role in defining Lenders’ requirements for project implementation organisation. The Bank’s conditionality clauses, e.g. to address specific environmental concerns, will contribute towards putting in place a framework that ensures good practice in the implementation of the project. 
• A Technical Assistance Grant of EUR 350,000 for the funding of a joint Lenders' Engineer. ZESCO’s implementation capacity, notably its procurement and financial management abilities, need to be strengthened and accompanied by enhanced monitoring. A formal and monitored Project Implementation Plan (PIP) will be established, supported and implemented by a full-time Project Implementation Unit (PIU) with core staff of international consultants.