Maravi

DBSA bemoans poor packaging of Zambia's hydropower projects

DBSA bemoans poor packaging of Zambia's hydropower projects
By Chiwoyu Sinyangwe
Friday June 13, 2008 [04:00]

DBSA has observed that it is difficult for Zambia to attract interest from potential investors into the hydropower generation sector because most of the proposed projects are poorly packaged. Development Bank of Southern Africa (DBSA) energy specialist Jean Madzongwe however said the problem of poorly packaged projects was not only exclusive to Zambia as it was a regional phenomenon.

“In Zambia, projects that are there are technically viable, everything like the environmental studies have already been done but these projects haven’t been properly packaged to attract investors,” Madzongwe explained.

“They are not bankable, they need a legal framework, the structuring of who actually is involved on those projects, need a credible off-take, so once all that is in place and it has been packaged well, then it would be attractive to all investors and I think that problem is not exclusive to Zambia; it is a common problem throughout the region.

“In fact, the current feasibility study being undertaken by the International Finance Corporation on the Kafue Gorge lower... and already ourselves, we are working with some legal team on packaging Itezhi tezhi power station and the extension of Kariba North Bank should be used as a start point.”

Madzongwe also said there was need to reform power utility companies in the region to make them more responsive to the changing dynamics and challenges of the energy sector.

“The problem we have right now is that the companies that are supplying power at the moment are in a weak situation financially, they need cost reflective tariffs, efficient revenue management and collection system,” Madzongwe said.

And commerce minister Felix Mutati also admitted that the country was always less prepared when courting investors into the country’s hydropower investments.

Mutati said there was need for proper packaging for marketing the hydropower projects.
He stressed that it was economically impossible for government alone to successfully develop the hydropower station of the size of Kafue Gorge Lower.

“There is need for greater imagination and always believing that it can be done. We need to start doing a lot of thinking ‘outside the box’ when we are going to look for money,” said Mutati. “Right now, we are less prepared, we are less persuasive and we need to shift from there.”

Labels: DBSA, ENERGY, MARKETING

posted by MrK @ 4:36 AM