Lusaka – The CEO of Zambia’s Industrial Development Corporation Mr Mateyo Kaluba has told The Southern Times that efforts are underway to raise US$250 million to revamp the country’s sole oil refinery.
Another US$400m is needed for related works.
The government recently placed the 36-year-old Indeni Oil Refinery on care and maintenance, which also provides an opportunity for to boost the capacity of the
Tanzania Zambia Mafuta (Tazama) Pipeline, which was built 53 years ago.
Last week the Energy Ministry said, “The public must note that we have decided to put Indeni Petroleum Refinery on care and maintenance which will result in having fewer employees while the others will be reassigned to manage fuel storage depots.”
The Industrial Development Corporation’s Mr Kaluba told this publication that repeated plant breakdowns, inconsistent supply of crude oil, and low investment in the sector haad been negatively affecting refinery and pipeline operations.
“We have plans to invest an initial US$250 million in Indeni Oil Refinery after discussions with prospective investors failed after we failed to agree on some of the terms that they demanded. We believe that we needed a project that can stand on its own feet.”
A further US$400 million is needed for investment in expansion and repairs to help boost capacity.
Mr Kaluba also shed light on recent disagreements with prospective partners on the project.
“The investors were asking the government to become the ultimate buyer and guarantor of the project, implying that the government needed to buy off its own firm or its signee as the case maybe, but we were looking for someone to commit investment for the long term, and that is why we are seeking to raise capital on our own and this is extremely urgent.”
Energy analyst Mr Johnston Chikwanda has proposed establishment of an independent taskforce to determine the full extent of the oil sector’s problems and to recommend viable solutions.
He said the taskforce should also look at the Petroleum Management Bill and why it is taking long to table it in Parliament.
Among the prospective partners for the refinery are Glencore Energy Limited (United Kingdom), China Petroleum Technology and Development Corporation, Joint Stock Company Global Security (Russia), Sahara Energy Resources Limited (UK), and Huiersanji Green Chem-Tech Company Limited (China).
The Zambian government wholly owns Indeni after France’s Total Finale let go of its 50 percent stake three years ago.
The Energy Regilation Board says Zambia consumes an average 1,6 million litres of diesel, 650,000 litres of petrol, 150,000 litres of jet- A1 and 50,000 litres of kerosene daily.