Completed Mixed AidData Chinese Aid

CMEC provides $15 million bridge loan for 15MW Lusiwasi Upper Hydropower Project

$15M USD

Funder	China Machinery Engineering Corporation (CMEC)
Recipient Organization	Zambia Electricity Supply Corp. (ZESCO)
Country	Zambia
Start Date	May 31, 2018
End Date	Sep 02, 2027
Duration	3,381 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`89490`

Grant Description

CMEC provides $15 million bridge loan for 15MW Lusiwasi Upper Hydropower Project On May 31, 2018, China Machinery Engineering Corporation (CMEC) and Zambia Electricity Supply Corporation (ZESCO) Limited — Zambia’s state-owned power company — signed a $15 million supplier’s credit (bridge loan) agreement for the 15MW Lusiwasi Upper Hydropower Project.

📋 Loan / Grant Terms

💰 Loan Amountcarries the following borrowing terms: a maturity of 1

💹 Interest Rate6%

It amount outstanding was The loan’s amount outstanding was $14,780,000 as of December 31, 2018, $14,780,000 as of December 31, 2019, $14,780,000 as of December 31, 2020, $17,041,704 (inclusive of $2,260,563 in interest arrears) as of June 30, 2021 and $6,897,015 as of June 30, 2022.

The purpose of the project is to construct a 15MW run-of river hydropower plant — with three 5MW power generation units — that is located about 700 km from Lusaka, and is about 5 km upstream of the existing 12MW Lusiwasi Hydropower Station. A canal which conveys the water towards the units is approximately 4.5 km up to the Forebay from the canal intake.

CMEC is the contractor responsible for implementation. On February 14, 2020, the first of the three 5MW power generation units went into operation. By February 10, 2021, all three power generation units were in operation.

📋 Staff Comments

This project is also known as the Lusiwasi Upper Hydropower, 15MW - Bridging Finance Project.
The tenure of the loan is 18 months (1.5-years) from when the loan comes into effect to when the major financing for the project comes through. It is unclear when and whether the major financing loan has been committed. Hence, AidData estimates the maturity as 1.5-years. This issue warrants more investigation.

📚 Sources & References

2020 Interim Report
Zambia’s Chinese Debt in the Pandemic Era - Briefing Paper
The First Unit of Lusiwasi Upper Hydro Power Plant Generates Electricity and Completes 72-Hour Grid-connected Trial Run, 15MW LUSIW ASI UPPER HYDROPOWER, 2019 Integrated Report
End June 202021 Public Debt Summary
End June 2022 Public Debt Summary
ZESCO Integrated Report 2020
ZESCO Integrated Report 2018 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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