26 April 2013- The Nava Bharat Singapore Pte unit building Zambia’s first coal-fired power plant in 50 years hopes to complete US$550 million in debt financing by August 2013.                   

Bloomberg News reports the company’s CFO V Lakshmi Narayana as saying that the company is in talks with lenders including the African Development Bank, China Development Bank, and the Standard Bank Group.  Standard Chartered plc and Barclays plc also expressed interest in funding Maamba’s power plant project.

“We have seen a very high level of interest,” Narayana says. “We received expressions of interest almost for 1.25 times more than we were seeking to raise.”

Maamba, which is located 240 km south west of Lusaka, is building a 300 MW power plant next to the coal mine it owns in Zambia’s Southern province, near Lake Kariba, to cover an electricity shortage that has led to power cuts in the region. The company also plans to take advantage of coal demand in the country that it says may double over the next year.

The plant will start producing power by October 2014, Narayana says, and the company will probably start building a second phase at the plant in 2015 that will double capacity.

Nava Bharat owns 65% of Maamba, while the Zambian government owns 35% through ZCCM Investments Holdings.  ABSA is advising Maamba on its financing.

The company is also talking to the Development Bank of Southern Africa and the Bank of China. The group of Chinese lenders will probably provide the biggest share of funding, Narayana says.

Zambia has a capacity to produce about 2,000 MW of power, almost all generated by hydro plants. The country has experienced shortages as mining industry growth outpaces the increase in electricity supplies.

While Maamba will depend on selling electricity to state-owned power utility Zesco for most of its profit, the company is also considering exporting coal to the Democratic Republic of Congo by rail, says corporate affairs manager Janardhan Lavu.