Completed Mixed AidData Chinese Aid

ICBC provides $36.84 million loan to ZESCO Limited for Connection of Lundazi and Chama to National Grid Project (Linked to Record ID#98551)

$36.84M USD

Funder	Industrial and Commercial Bank of China (ICBC)
Recipient Organization	Zambia Electricity Supply Corp. (ZESCO)
Country	Zambia
Start Date	Aug 10, 2017
End Date	Jul 25, 2028
Duration	4,002 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`57573`

Grant Description

ICBC provides $36.84 million loan to ZESCO Limited for Connection of Lundazi and Chama to National Grid Project On August 10, 2017, the Industrial and Commercial Bank of China (ICBC) signed a $36.84 million loan facility agreement with ZESCO Limited — Zambia’s state-owned power company — for the Chipata-Lundazi-Chama 132KV Transmission Line Project.

📋 Loan / Grant Terms

💰 Loan Amountcarries the following terms: a 15-year maturity

📅 Maturity15 years

⏳ Grace Period3 years

The proceeds of the loan were to be used by the borrower to partially finance a commercial contract between ZESCO Limited, Jiangsu Etern Co. and Sinohydro Corporation Ltd., which was signed on or around October 2014. As of December 31, 2017, the loan's amount outstanding was $7.4 million.

The purpose of this 2-part project was to connect Lundazi and Chama districts to the Zambian national power grid because residents were receiving unreliable power from ESCOM Malawi.

It involved the construction of a 305 km, 132 kv transmission line from the Chipata sub-station to Chama via Mwansephangwe, Lundazi, Eggichickeni (Chief Magodis area) as well as four new 33kv substations in Mwasemphangwe, Lundazi, Egichikeni and Chama. Jiangsu Etern Co. and Sinohydro Corporation Ltd were the EPC contractors responsible for project implementation.

The first down payments to the two contractors were made in 2016, thus enabling the preliminary design works to commence.

According to the ZESCO's 2017 Integrated Report (source ID 114272 p. 62), Sinohydro Corporation Ltd mobilized to the site and commenced works during 2017.

However, Jiangsu Etern was still awaiting issuance of a Government of Zambia sovereign guarantee to achieve financial close. It expected to mobilize in the first quarter of 2018. Both projects were scheduled to last 18 months. By the end of 2018, the project had achieved a 40% completion rate. One of the transmissions lines was connected to grid on December 16, 2019.

The project as a whole was completed on or around February 21, 2021.

📋 Staff Comments

This project is also known as the Connection of Lundazi and Chama to the National Grid Project and the 132KV Transmission Line Project in Eastern Province of Zambia. The Chinese project title is L&C305输电线路 or 赞比亚东部省132KV 输电线路项目 or 赞比亚CLC132输电线路项目.
For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
Some sources suggest that loan agreement was signed on January 26, 2017 and financial closure was achieved on October 13, 2017. This issue warrants further investigation.
The borrowing terms of the loan are drawn from a 2017 financial report from ZESCO (source ID#67341 p. 41).
In 2014, Jiangsu Etern Co. (a privately-owned Chinese enterprise) was awarded the substation construction contract, and Sinohydro Corporation Ltd. won the Chipata-Lundazi 132 kV transmission line contract for a combined cost of $64 million.
According to one of the lawyers who advised on the transaction, the project scope involved the engineering, design, supply, installation, construction, testing and commissioning of the Chipata-Lundazi-Chama 132KV transmission project LOT 1; the 85 km Chipata West-Mwasemphangwe 132KV transmission line, the 90 km Mwasemphangwe-Lundazi 132KV transmission line, 40 km Lundazi- Engichikeni 132 KV transmission line, and the 90 km Egichikeni—Chama 132KV transmission line. See https://www.dropbox.com/s/5xqey9jvmeo21jn/Project%20Financing.pdf?dl=0

📚 Sources & References

ZESCO LIMITED REPORT AND FINANCIAL STATEMENTS
Feasibility tests for ZIZABONA energy project progresses
Thirty-one ZESCO power transmission line towers in Eastern province vandalised.
LUANGWA TO BE CONNECTED
Lundazi
Chama connected to national grid
ZESCO Integrated Report 2017
中国电建赞比亚可持续发展报告
Chipapa-Lundazi-Chama 132kV Transmission Line in Eastern Province of Zambia, next to Malawi, important for urban power supply.
永鼎中标赞比亚国家电力项目海外市场相中“汾湖制造”
Hello friends Just an update on the 132kv transmission line from Chipata Sub-Station to Lundazi and Chama
永鼎中标赞比亚国家电力项目海外市场相中“汾湖制造”
Zesco Limited in Eastern Province says it is embarking on reliability projects to ensure sustainable power supply to the province.
ZESCO 2016 Integrated Report, 2017 Integrated Report
Project Financing
中国对外承包工程国别（地区）市场报告2019-2020.pdf
赞比亚CLC132输电线路全线贯通
赞比亚CLC132千伏输电线路项目顺利竣工, 【Belt and Road Story】Cook Bright Future with A Heart of Pure Loyalty
SI No.88 of 2018
Tuesday, 22nd March, 2022 National Assembly Notes
Wednesday, 26th October, 2022 National Assembly Notes Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Zambia Electricity Supply Corp. (ZESCO)

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