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Itezhi-Tezhi Hydro Power and Transmission Line Project - IRS

Southern Africa
Grant Amount
EUR 17,100,000
Total project cost
EUR 255,000,000
Under disbursement
PFG Lead Financier
PFG co-Financier

The Itezhi-Tezhi Hydropower Project (ITT) consists of two components.

a) The development, financing construction, operation and maintenance of a 120MW base load Hydro Power Plant at the site of the existing ITT dam on the Kafue River in Zambia.

b) The new Transmission Line (of approximately 280km) via Mumbwa onto Lusaka West that will connect the power station to the national grid and through it to the SAAP. The transmission line is to be developed, constructed, financed and operated by ZESCO.

The overall project is attractive since it will take advantage of an existing infrastructure with the dam being operated since more than 30 years. Adding a power station will thus limit construction/cost/risk as well as keeping environmental impact low and minimizing resettlement. The new Transmission Line will wheel renewable energy produced from a remote area for the benefit of Zambia and ultimately of the SAAP region.

A EUR 17.1 million EU-AITF Interest Rate Subsidy applies to both the EIB and AFD loans financing the Itezhi Tezhi project. It reduces the interest rate of the loans to a level compatible with the debt sustainability requirements as the country is a Least Developed Country which has undergone debt restructuring under the HIPC initiative. The IRS applies to the transmission line as well as for the equity injection into ITPC for the hydropower plant, and is used simultaneously with EIB’s and AFD’s loan disbursements which started in 2015.