Itezhi-Tezhi Hydro Power and Transmission Line Project - IRS

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 South African Region. The transmission line is to be developed, constructed, financed and operated by ZESCO.

The overall project will take advantage of an existing infrastructure and add a power station to limit construction/cost/risk as well as keep environmental impact low and minimize resettlement. The new Transmission Line will wheel renewable energy produced for the benefit of Zambia and ultimately the South African region. As of end-2018, the project is near to completion.

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. As of end-2018, an amount of EUR 13.87m was used, while the remaining balance stands at EUR 3.2m.