Costs and Financing
Western Power will employ a Project Finance type structure to raise the money required to construct the project.
Project Finance is commonly used to finance large infrastructure projects as it uses the security of a long-term contract – in this case a contract to sell electricity for 25 years, as security to borrow up to 80% of the project cost from a group of lenders.
For the Ngonye Falls project the lenders will likely include Development Finance Institutions, which are organisations funded by governments and mandated to support infrastructure projects in the developing world.
Western Power is discussing the terms of a Power Purchase Agreement (PPA) with ZESCO, the Zambian national utility for the purchase of all the electricity produced by the power station for a period of 25 years.
Construction Costs Breakdown