African Energy Intelligence (Pay per Article)
N° 641 12/08/2010
The Agence Francaise de Developpement (AFD) has just cancelled a trip by
officials to Lusaka concerning funding for the 120 MW Itezhy Tezhy dam
on the Kafue river in Zambia. The cancellation followed on the heels of
a third annual visit by Proparco, AFD's private investment arm, which
resulted in a stalemate over the same matter. The setback stems from the
refusal of the project's main donor, the European Investment Bank (EIB)
to proceed any further without information from the Zambian authorities
on allegations that officials accepted bribes from France's Alstom in
the water and power sectors earlier this decade in return for contracts.
The French giant, which works in Zambia through its affiliate COMELEX,
has been accused of similar behaviour in several other countries. Legal
action was taken against the group in Switzerland in 2008. Three
executives of Alstom in the United Kingdom, where one of the company's
two offices that pay its commercial agents in the world is situated,
were questioned by Swiss police this March.
Nonetheless, the AFD and Proparco have both approved the Itezhi Tezhi
dam scheme and decided how each will take part. Proparco is to help
bankroll the generation part of the dam scheme and AFD the transmission
part, under the authority of EIB. The paperwork on the loans is in the
final stages after a technical assessment of the project passed muster.
A delegation from the Itezhi Tezhi Power Corporation, a joint venture
between Zambia's ZESCO and the Indian group Tata Holding, even visited
Paris in October to meet with aides from ADP and Proparco and attempt to
speed up matters. But if EIB backs away from the project the French
agencies would probably hold back, too.
While waiting for EIB's decision, and for lack of anything else to get
its teeth into, Proparco is looking at a smaller scheme: the 40 MW hydro
power station at Kapombo Gorge, which is to cost an estimated USD 120
million. The Zambian company Copperbelt Energy Corporation (CEC), which
supplies power to copper mines in the north-west, completed a
feasibility study in June. The firm says it's ready to start work in
March, if the money is forthcoming.
[Note: Between 1998 - 2005, the World Bank administered Zambia's $198.4m
Power Rehabilitation Project, in which Alstom received three Bank
contracts. The World Bank coordinated a variety of donors within the
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