The ‘spontaneous combustion’ that haunts the people and the environment in around the mothballed Maamba coal mine in Zambia will be a thing of the past.
An $800m investment is set to kill two birds with one stone. It will deliver a 300MW coal fired power station and restore operations of the Mamba coal mine.
This was reiterated by the African Development Bank (AfDB) after its board approved this week a senior loan of up to $150 million for the Maamba project.
The AfDB statement said the project aims to tackle a severe environmental concern at the mine caused by the unregulated and spontaneous self-combustion of tons of currently unused low-grade coal while producing much-needed electricity for the country and the region.
The statement added that the Maamba power plant project will increase supply and reliability of electricity in Zambia which is currently experiencing black-outs and is heavily reliant on drought-sensitive hydro power.
Zambia’s hydro power production accounts for 96% of total production, which exposes the country to severe economic risks in case of drought.
The project is being developed by Maamba Collieries, a company incorporated in Zambia in 1971 and privatized in 2010 through a joint venture between Nava Bharat Singapore (NBS) and Zambia Consolidated Copper Mines (ZCCM), a public investments holding company.
The AfDB said as the transaction’s co-mandated lead arranger (MLA) alongside Absa Capital, a commercial bank from South Africa, it is playing a leading role in mobilizing capital from development finance institutions (DFIs) and commercial financiers, and coordinating the due diligence process for the $800-million project.
AfDB’s Division Manager for Infrastructure Finance, Tas Anvaripour said, “After the approval of the Ithezi Thezi hydropower project in 2012, I am delighted to reaffirm the African Development Bank’s commitment to support Zambia’s power sector as it embarks onto the path of energy source diversification and resilience in an increasingly climate change-sensitive environment”.
By capitalizing on readily available low-grade coal resources that are otherwise left to self-combust in the open air and inflict an environmental burden on the entire Maamba area, the project will produce much-needed power for households, businesses, and Government, while remediating a long-standing environmental concern.”