Indian Firm Commits $5 Million to Coal-Powered Energyadmin
India’s Era Engineering Innovations (EII) has committed an investment of US$5 million into coal-powered energy generation in Zambia following the just-ended Conclave on Indo-Africa Project Partnership in New Delhi.
Commerce, Trade and Industry Minister, Felix Mutati, who led the Zambian delegation to the meeting signed a Memorandum of Understanding (MoU) with EII director, Ajay Mishra over the commitment on the sidelines of the conclave.
Mr Mishra said his company would be sending a delegation of experts to Zambia in the first week of April to start the project assessment with plans to place the actual investments later in the year.
“We are keen on this investment and should be in Zambia in the first week of April,” Mr Mishra said.
Mr Mutati said Zambia and the Southern African Development Community (SADC) had a shortage of 1,600MW of electricity and needed to develop huge hydro-power plants but still needed coal-powered thermal generation for immediate use.
“There is a lot of market for power in Zambia and beyond. We also have vast coal resources which we will be happy to see transformed into electricity through your planned investment,” Mr Mutati said.
Maamba Coal Mine produced about 600,000 tonnes of coal per year in the 1980s, but years of undercapitalisation have led to a fall in production.
The coal mine has 78 million known coal reserves to last over 70 years while the coal mine has capacity to produce up to one million tonnes of coal per year.
Zambia’s High Commissioner to India, Keli Walubita assured the Indian investors that Zambia was a stable country with a strong democracy and ideal forf investment.
Zambia Development Agency (ZDA) chief executive officer, Glyne Michelo said the country offered fiscal and non-fiscal incentives, including tax holidays for companies tha t were starting up.
Earlier, Mr Mutati met India’s minister of trade and assured that there was no cause for apprehension with Zambia’s dealing with China. He said Zambia needed a lot of investment and there was still much from elsewhere even with Chinese investment.
“In fact, competition is very much a reflection of Indian culture,” he said.
The minister said he was tired of “exporting jobs” and needed value addition to its raw materials within Zambia.
The Indian government also assured that it was in the process of finalising duty-free and quota free markets for Zambian exports to India.
Mr Mutati also engaged officials from India’s business giant, Tata, who expressed desire to expand into Zambia’s tourism sector as well as coal and iron mining.
The minister also met business executives from Angelique International, who are involved in Chilanga Cement and wish to commit more investment into Zambia.
Mr Mutati also met officials from Beekay Enterprises who would be visiting Zambia in April with a view of opening up a manganese plant. Beekay have already made a commitment to invest $20 million in the project.
Meanwhile the Government will consider external borrowing as a measure of boosting investment in the electricity generation capacity if need arises in view of the current power shortage reports a Times staffer.
Energy and Water Development Minister, Kenneth Konga said this in an interview in Lusaka yesterday.
Mr Konga was responding to suggestions from the International Monetary Fund (IMF) that the Government should consider external borrowing as an immediate measure to boost financial investment in power generation.
The minister said the Government had several options in solving the current power crisis including the money to be realised from the new mining tax regime.
He said the Government would first depend on money to be raised internally but if there would be any serious shortfall, then it would definitely consider external borrowing.
“But if we can be able to raise funds internally, it is better for the Government to expand the power generation capacity without any external borrowing,” he said.
He however said that the power rehabilitation and expansion exercise was progressing well and that the Government was assisting Zesco in ensuring that the power crisis was resolved.
Mr Konga appealed to the public to be careful in the use of energy at the time that Zambia and the whole region was faced with a serious electricity shortage.
He said all appliances using electricity that were not being used should be switched off while those constructing new structures should also consider utilising solar power and other energy serving options.
He said President Mwanawasa’s advice on ensuring care in the use of electricity should be taken seriously to avoid the power outages being experienced in Zambia.
On the fuel supply, he said the situation was currently ‘smooth’ and people should not panic because the Government was in control of the situation.
He added that the Government was currently negotiating with the preferred financier for the K1.2 billion crude petroleum supply after a supplier was awarded the contract early this year.