Zambia Approves Construction of Second Coal-Fired Power Plant Amid Energy Crisis
Zambia’s Energy Regulation Board has approved the construction of a second coal-fired power plant as the country faces its worst drought in decades, which has significantly reduced output from its hydroelectric dams that supply the majority of its energy.
The new 300 MW facility will be built in the southern region of Zambia, doubling the capacity of an existing plant at the site, according to a statement released on Monday. Maamba Collieries, primarily owned by Hyderabad, India-based Nava, will lead the project.
Zambia generates about 85% of its power from hydroelectric turbines. This heavy reliance on hydroelectric power frequently results in severe shortages when water levels drop during droughts.
The current El Niño-induced dry spell, the worst in at least four decades, has led to rolling power cuts lasting a minimum of 12 hours daily, forcing the government to slash its 2024 economic growth forecast to 2.3%.
Energy Minister Peter Kapala announced on state television on June 30 that Zambia signed an implementation agreement with Maamba at the end of June, and the company is nearing financial close for the project.
Zambia’s national pension fund is evaluating a proposal to finance part of the estimated $400-million project, according to the company’s response to questions on June 14.
Nava declined to comment on the plans last month.
Securing financing for new coal power projects has become increasingly challenging as many banks, including Chinese state-owned lenders, have stopped lending for projects that burn the dirtiest fossil fuel.
