AFCC2/RI-3A-Southern Afr Power Mrkt APL 1 (FY04)

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The Southern African Power Market Project for Zambia aims to facilitate the development of an efficient regional power market which will: (i) decelerate the increase of electricity prices in the Southern African Development Community countries through increased competition; (ii) increase industrial competitiveness of the region; (iii) create the conditions for accelerated investment in the power sector, including by the private sector; and (iv) foster regional integration. The project has the following four components: Component 1) will support Southern African Power Pool (SAPP) Coordination Center including: an Energy Management System (EMS). Component 2) will increase the capacity of the transmission corridor from the Democratic Republic of Congo (DRC) to the SAPP by: upgrading and rehabilitating the converter and inverter stations on the Direct current (DC) transmission link from Inga to Kolwezi; maintaining the DC transmission line from Inga to Kolwezi and installing a new communication system on the line; rehabilitating and reinforcing the Alternate Current (AC) network from Kolwezi to Karavia substation in the Katanga region of the DRC (including the addition of reactive compensation equipment); constructing a 220 kV transmission line from Fungurume to Karavia substation and from Karavia to the DRC/Zambia border complete with the provision of integrated infrastructure services along the line route. (It is important to note that Copperbelt Energy Company (CEC) of Zambia, a private company, will arrange the financing and construction of the continuation of the new transmission line (45 km) from the DRC/Zambia border to Luano substation near Kitwe in Zambia); carrying out mitigation of environmental and social impacts; and carrying out environmental studies for the future expansion of the DRC power sector. Component 3) The pooling of power resources offers unique, value-added advantages. It allows optimum use of available regional resources; enhances environmental protection efforts; facilitates a sustainable development approach; reduces the cost of electricity service to customers; increases the ability to meet potential customers' demand; reduces risk of power shortages and brings new revenue opportunities. Component 4) Project Preparation and Management - Financing of the project will be coordinated by the Bank, with co-financing expected from bilateral donors (USAID, NORAD). The program has been prepared with the financial support of a grant from Japan (PHRD grant for an amount of US$617,732). The recipient of the grant was the Government of Zimbabwe who passed it on to the SAPP Coordination Center.