Zambia Weighs $900 Million Coal-Power Plan as Drought Hits Hydro

Zambia is considering plans by a Chinese-owned company to build a $900 million coal-fired power plant, as it battles unprecedented electricity shortages caused by a record drought. 

The worst regional dry spell in more than a century has stricken hydro-electricity generation that accounts for 85% of Zambia’s supply, with households and businesses enduring outages lasting more than a day at a time. Copper producers including First Quantum Minerals Ltd. have had to import costly power to maintain output levels.

The drought has prompted the government to consider alternatives to cleaner and lower-cost hydropower after businesses including Wonderful Group of Companies Ltd. proposed using coal to fuel electricity generation. The Chinese-owned firm plans a 600-megawatt plant.

Zambia has previously approved the construction of only three power coal-fired power plants — two of them this year.

“Every company knows the impact that climate change had this year because of the extensive drought,” Frank Mulenga, chief operations officer at Wonderful Group, said in a meeting with Zambian President Hakainde Hichilema Thursday. At Wonderful, which manufactures ceramic tiles and fertilizer, the power crisis has curbed output by as much as 40%, he said.