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Zambia Approves New Coal Plant Amid Drought

The energy regulator of Zambia has approved the construction of the country’s second coal-fired power plant as the nation grapples with its worst drought in decades. This drought has significantly cut output at the hydroelectric dams that generate most of Zambia’s energy.

The Energy Regulation Board has issued a construction permit for a 300 MW power plant to be built in the southern part of Zambia. This new facility will double the capacity of an existing plant at the same site. The project will be led by Maamba Collieries, a company primarily owned by Hyderabad, India-based Nava.

Zambia relies heavily on hydroelectric turbines, which produce about 85% of the nation’s power. However, this dependence has led to severe power shortages whenever water levels drop during droughts.

The current El Niño-induced dry spell is the worst the country has seen in at least 40 years. This drought has caused rolling power cuts lasting a minimum of 12 hours each day. As a result, the government has been forced to reduce its economic growth forecast for 2024 to 2.3%.

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Economic Impact and Project Funding

At the end of June, Zambia signed an implementation agreement with Maamba Collieries for the new power plant. Energy Minister Peter Kapala announced that the company is nearing financial close for the project.

The national pension fund of Zambia is currently evaluating a proposal to provide financing for part of the estimated $400-million project.

The project aims to address Zambia’s ongoing energy crisis by providing a more reliable power source. However, the move to construct a new coal-fired power plant comes at a time when financing for coal projects has become increasingly difficult.

Many banks, including Chinese state-owned lenders, have ceased lending for projects that burn coal, the dirtiest fossil fuel. Last month, Nava declined to comment on their plans for the new plant.

Despite the environmental concerns, the Zambian government sees this new coal-fired power plant as a step to ensure energy security. By diversifying its energy sources, Zambia hopes to stabilize its power supply and mitigate the economic impacts of energy shortages.

In addition to securing energy supply, the new plant is expected to create jobs and stimulate economic activity in the region. The construction and operational phases will provide employment opportunities and contribute to local economic development.

Balancing Energy Needs and Environmental Concerns

While the new coal-fired power plant is set to alleviate some of the immediate energy shortages, it also raises long-term environmental concerns. Coal-fired power plants are significant sources of greenhouse gas emissions, which contribute to climate change.

Environmental groups have expressed concerns over Zambia’s increased reliance on coal. This is because it comes at a time when many countries are shifting towards cleaner, renewable energy sources.

The government must balance the need for reliable energy with its environmental responsibilities. Zambia has abundant renewable energy resources, including solar and wind, which could be further developed. Investing in these alternatives could provide a sustainable solution to the country’s energy challenges.

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