Zambia to Cancel Expensive Power Station Contract Amid Cost Concerns.
Zambia has announced its decision to terminate a building contract awarded to General Electric Co. and Power Building Corp. of China due to the excessive costs involved in constructing a 2,400-megawatt power station on the Zambezi River. The country’s energy minister, Peter Kapala, acknowledged that proper procurement procedures were not followed during the initial purchase. The state-run Zambezi River Authority oversees the dam’s development and estimated the project’s price tag at $5 billion last year.
Kapala stated, “We are disengaging from that contract and we hope to re-advertise it and revisit everything that was agreed to before. Mainly, it was because of the cost, it was just too much.” He further explained that the hydrology of the Zambezi River might not be conducive to supporting a 2,400-megawatt hydro-plant. Instead, a hybrid approach combining solar and hydropower could be considered, potentially resulting in a reduced capacity of around 1,000 megawatts.
General Electric and Power China have yet to provide a response to the announcement. The Batoka Gorge project, designed to generate 2,400 megawatts of power, was originally planned to commence in 2020 but faced delays due to factors such as the COVID-19 pandemic and challenges in securing financing. Both Zambia and Zimbabwe selected General Electric and Power China to jointly construct the facility as both nations in southern Africa are grappling with electricity shortages caused by poorly maintained plants and reduced hydroelectric output due to droughts along the Zambezi River.
Zimbabwe’s secretary for energy and power development, Gloria Magombo, stated that she was unaware of the statements made by the Zambian minister and that her ministry would provide a response at a later time.
