Mulembo Lelya Hydroelectric Company Limited

Company Description

Mulembo Lelya Hydro Electric Power Limited (MLHEPL) is a limited company by shares and owned by AFI Zambia Ltd, Mchimadzi Hydro Electric Ltd, Engineer Ezekiel Kasaro and Dr. Alick Mwanza.

Countries of Operation

Zambia

Ownership of Company

MLHEPL is an incorporated registered company in Zambia and the proposed shareholders are Mchimadzi Hydro Electric Power Ltd., AFI Corporate Advisors (Pty) Ltd. and Africana Finance & Investments Zambian Limited. The proposed shareholders have signed a Joint Development Agreement for the development of this project.

Number of years since incorporated

10 Years

Stage

Preliminary | Initial studies completed | Feasibility study completed

Annual Revenue (in EUR)

Not indicated

Number of employees

1000

There is no pool of qualified, skilled or trainable labour for management, technical and supervisory work at the project site but are available within the country. However, there is sufficient unskilled labour in the project location and the country at large. During implementation of the project, specialized training and on the job training will be provided by the contractors and the required number of people to be engaged will depend on the project plan with the EPC contractor and potential investor(s). About 1000 people will be employed at the peak of the construction period and about thirty permanent staff will be engaged to run the power plant during operations.

Project Pitch

The Mulembo Lelya Hydroelectric Power Plant project involves the development of the 118.4MW MLHEP Station which is designed to exploit the energy potential of the Mulembo River in Mkushi and Luano Districts and Lelya River border of Nyimba and Serenje Districts. The gross head of the two rivers is approximately 450m and the proposed layout will include a dam, a water transfer scheme from Lelya to Mulembo River leading to the main hydropower plant.

A small hydropower plant will be built at dam toe which will exploit the head created by the reservoir with an installed capacity of 7MW. The dam provides significant plant flexibility and includes possible peak power production, which could be further enhanced by integration of the hydro power with wind and solar energy. The duration of the construction has been estimated on the basis of a typical specialized contractor’s standard timeline to take 42months.

The Project economics show competitive tariffs to offtakers and IRR to investors averaging 16%, in US Dollar terms. The Project is anticipated to generate up to 451 gigawatthour of electrical energy per year which will be injected into the 330KV grid at Pensulo SubStation through a 120km, 220 kV transmission line and the power will be taken by any potential bankable offtaker.

The target market for the power is the Zambian market and the Southern Africa Power Pool (SAPP). All the critical studies have been completed and the 3 major milestones to get the Project to financial close are the EPC contract, PPA and signature of the IA. The project cost including the transmission line to evacuate the power to the Pensulo substation is estimated at US$285 million.

The project is open to FDI through a minority or majority stake, or through a JV or PPP. This project is situated on the border of the Central and Eastern Province.

The targeted market for this project is the local i.e. Mkushi, Luano, Nyimba, and Serenje Districts through ZESCO, the national power utility company.

Additionally, the power will be available for export to the Southern Africa Power Pool (SAPP) countries in particular the Democratic Republic of Congo.

Total Project Cost (in EUR)

EUR 10,113,590

Financing needs (in EUR)

EUR 10,113,590

The land for the project is available and the market is equally available. The Potential investor(s) is expected to meet the cost for the development of the plant and other associated transmission facilities of the project in cash and in kind.

The project will enjoy Zero percent import duty rate on capital equipment and machinery for five years and Accelerated depreciation on capital equipment and machinery.

Type of financing needed

Open for FDI through a minority stake

Planned allocation of fundraising capital

Greenfield (new activity for the company); Technology and know-how expertise; Market access (Domestic or International buyers)