The International Finance Corporation (IFC) has been signed on as lead arranger for the Kalumbila-Kolwezi 700MW interconnector being developed by Enterprise Power DRC (Enpower) and powering the Democratic Republic of Congo from the Southern African Power Pool via Zambia.
Enpower yesterday announced the signing of a lead arranger mandate with the IFC yesterday. Being developed as a 330kV interconnector, the new line will have a thermal capacity of 700MW.
It will “help alleviate the significant power shortfall” in southern DRC.
The Zambia/DRC interconnector comes at a time when other regional countries such as Zimbabwe and Zambia are also facing crippling electricity supply constraints, although South Africa has boosted its power generating capacity and ended load shedding.
Enpower and the IFC signed a collaboration agreement in June 2022 to assess the bankability of the interconnector project. After being signed on as lead arranger, the IFC will now coordinate debt syndication, conduct lender due diligence.
It is also expected to provide a loan tranche at financial close of the project while the African Infrastructure Investment Managers (AIIM), a leading institutional investor in the African energy space, is also expected to extend equity funding for the project.
“Enpower’s mission is to supply power to its industrial clients in southern DRC, and we are pleased that the IFC is supporting our initiative to build this strategic transmission infrastructure,” Nikolai Germann, director of Enpower.
The company had already secured supply and offtake agreements, development rights, environmental licenses, rights of way, and construction permits for the Kalumbila-Kolwezi interconnector.
“The signing of the lead arranger mandate is a significant step forward in making available much-needed transmission capacity for our clients in the DRC,” added Germann.
Teddy Lwamba, Minister of Electricity for the DRC said the interconnector was key for the country’s Lualaba and Katanga provinces that are expected to benefit from electricity connectivity under the new line.
“The Lualaba and Haut Katanga provinces are a significant contributor to our national budget and the provision of clean and affordable power to the industry is a priority,” Lwamba said.
“We are satisfied that Enpower is executing our concession agreement to reinforce our southern power grid in collaboration with the national utility SNEL and allow for increased imports of much-needed electrical energy.”
Zambia, which is scrambling for ways to bridge the crippling power deficit it is facing mainly as a consequence of reduced water levels at Kariba Dam from where is produces hydro-electricity, said the interconnector was a major infrastructure investment.
According to Zambia Energy Minister, Makozo Chikote, “the Kalumbila-Kolwezi Interconnector Project is a key infrastructure investment that will bring lasting benefits to our countries and the Southern African region” as a whole.
“The Government of Zambia is committed to supporting and fast-tracking the development of this important project for our energy sector and broader economy,” he added.
BUSINESS REPORT