Chimanga Mini Hydro Power Project

Chimanga Mini Hydro Power Project involves the establishment of a mini-hydro power plant at Chimanga Falls in Mushika Village of Kaputa District, Northern Province. The head of waterfalls at Chimanga falls is 5m which makes it suitable for the installation of a mini-hydro power plant with a proposed Tariff of 8c/Kwh. Additionally, the Project’s business model primarily focuses on feeding into the already exiting Zambia Electricity Supply Corporation Limited (ZESCO) supply at a sustainable tariff level. Thus, the project will not only supply electricity to the targeted households but it will also sell to ZESCO through a Power Supply Agreement (PSA). This Project is feasible and has potential to feed in up to 800Kw of power into the national grid. The Project is also economically viable with positive economic parameters ENPV of US$9,064.48, EIRR of 28% and life span of between 35-40 years. This Project is open for FDI through a majority stake and the Rural Electrification Authority (REA) will facilitate the project and 50% capital subsidy will be provided so as to enable private sector investment within the rural electrification space. The total estimated cost for operationalizing this project is USD3.7million and the two major cost of a mini-hydro plant are civil works and procurement of electromechanical equipment. Hence, any potential investor(s) to undertake such a project should also consider the technical and economic feasibility studies as well as the administrative and monitoring costs which have not been included. Alternatively, REA could develop the sites and engage a private company through a management contract to oversee operations and maintenance of the project sites. The project is also viable with a capital subsidy of 50% from REA and the issuance of these subsidies is guided by the Framework for Managing Capital Smart Subsidies in Zambia and The Guidelines for Financing Rural Electrification Projects in Zambia.

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