The Civil Engineering Contractor January 2019 | Page 14

INFRA AFRICA
Batoka Gorge hydro project enters funding phase
The proposed Batoka Gorge hydro project, which will supply
power to Zambia and Zimbabwe, may reach a financial
investment decision this year that may result in the listing
of special-purpose vehicles in each country, an African
Development Bank official said. Zimbabwe and Zambia have
agreed in principle on the USD3.6-billion Batoka Gorge
Hydro Electricity scheme. The project is at the tail end of
preparation, poised to embark on the capital-raising phase
in 2019.
Construction of the 2 400MW Batoka Gorge hydroelectric
power plant and dam in the central portion of the Zambezi
River Basin, extending across the international boundary
between Zambia and Zimbabwe, is easing towards
construction phase. The project comprises a 181m high,
720m roller-compacted concrete gravity arch dam, radial-
gated crest-type spillway, four intakes in the reservoir, two
surface power plants, six turbines, and transmission lines.
Tunnels on either bank will divert water for the purposes
of power generation, thereafter directing the water back to
the Zambezi.
Presenting the project at the 2018 Infrastructure Africa
conference, for the purpose of informing and finding
investors, was Edward Kabwe, director of finance of the
Zambezi River Authority (ZRA), a bilateral organisation
owned 50/50 by Zimbabwe and Zambia. Batoka will be the
third dam on the Zambezi, with the largest, Lake Kariba,
further downstream and similarly straddling both Zambia
and Zimbabwe, followed even further downstream by
Cahora Bassa in Mozambique. The stretch of the Zambezi
between Victoria Falls and Lake Kariba has long been
identified as having high potential for hydroelectric power
generation — first mooted as long ago as 1972.
“This will be a much smaller lake than Kariba, because
all the impounded water will be contained within the
gorge — but it has high generation capability,” says
Batoka Gorge will be the third dam on the Zambezi River.
12 | CEC January 2019
Kabwe. At the moment, the location is pristine; though,
the environmental and social impact assessment revealed
negligible environmental and social risk.
Risk management is key
Three studies have so far been undertaken, with South
African-based consulting firm EY having been commissioned
as the transactional adviser to oversee and verify that the
project was ‘bankable’. Engineering and technical feasibility
studies have been refreshed as they were first done many
years ago, and there has been completion of environmental
and social impact studies, as well as legal and transaction
advisers (ENF). The next phase is the mobilisation of
funds; procurement of developers and contractors; then
construction and commissioning, says Kabwe.
“The structure is flexible, allowing
investors to put capital to either the
north bank (Zambia), the south bank
(Zimbabwe), or the entire project.”
Tender designs will take place in 2019. Batoka Gorge lies
54km downstream of Victoria Falls, and it will become
“a small lake”, says Kabwe, “unlike Kariba [which covers
a massive area]. The area is not inhabited and so there
is minimal community impact, with no people having
to be resettled, except possibly where there are power
transmission lines, though even here they will mostly use
existing lines. It’s therefore ‘a green project’”.
Kabwe described the economic feasibility study as having
revealed a reliable market for power, both among the
Southern African Power Pool and the East African Power
Pool, while “there is a power deficit in both Zimbabwe and
Zambia”. The major risk to the project was hydrological (or
drought), but Kabwe says a hundred years of rainfall pattern
data reveal that the smaller lake has reduced the hydrological
risk, and rain in the wide catchment area “does not fail”.
“We [ZRA] as project sponsor have had a good record of
managing Kariba. The project also has a low environmental
footprint. We consequently received USD6-million
financial support for the feasibility study via a World Bank
managed fund, the Cooperation in International Waters in
Africa (CIWA).” The CIWA programme assists riparian
governments in sub-Saharan Africa in unlocking the potential
for sustainable, climate-resilient growth by addressing
constraints to cooperative water resources management and
development. The project is also getting assistance from the
Nepad Infrastructure Project Preparation Facility (Nepad-
IPPF) special fund established to assist African countries
www.civilsonline.co.za