14 September 2010 - Zambia expects a power project that will add 360 megawatts to the national grid to start producing electricity way ahead of the November 2012 target, a senior project official said on Monday.

Zambia, Africa's top copper producer, needs to raise its power generation capacity to ensure sufficient supply as demand is expected to rise on the back of new investments in mining and other sectors.

Mundia Simainga, the chief civil engineer at the Kariba North Bank power extension project located more than 130 km south of Lusaka said almost all the surface excavation had been completed and 50 percent of the underground excavation was done.

"The contract says November 2012 but at the pace we are moving and if we continue like this we could have one machine generating electricity much earlier than November 2012," Simainga told Reuters, but could not give an exact start date.

The EXIM Bank of China last month agreed to lend state power utility Zesco Ltd $315 million and DBSA would provide the remaining $115 million for the project whose contractor is Sino-Hydro of China.

"The project started way before final financing arrangements were put in place with an initiative by Zesco to put in a bridging finance. Zesco provided bridging finance to the tune of $50 million," Simainga said, referring to Zambia's state-owned power utility.

The Kariba North Bank Extension project would supply power to planned uranium mines in southern Zambia and ease the shortage of power in the southern African region, he said.

The project involves putting up two new machines with a power generation capacity of 180 MW each.

The hydro plant now produces 540 MW, but that will rise to 720 MW by October this year when the last of existing four generators is upgraded, he said.

Zambia currently generates 1,800 MW, with peak demand estimated at 1,600 MW, but forecasts demand to rise sharply in the coming years, government data shows.