SADC – JAPAN INFRASTRUCTURE SEMINAR “Investment Opportunities in Zambia’s Infrastructure”

March , 2012

A presentation of the Zambia Development Agency

Zambia: Africa’s New Frontier for Investments and Profits Presentation Outline

Why Zambia? Positioning Investment Opportunities Investment Framework Conclusion Zambia in the Region and Beyond

Area: 752,614 sq km Common borders with 8 (including Mozambique) Population: 13 mil (2010 census) Independence: 1964 Religion: Over 90% Christian, Muslim 4%, 1% indigenous

Other market opportunities through agreements / membership to: EU through the EBA initiative USA through AGOA Market Initiative Canadian Market Access Initiatives Chinese Market Access Initiative Japanese Market Access initiative

Zambia: Africa’s New Frontier for Investments and Profits ZESCO GRID (66 – 330kV) To Sumbuwanga

KAPUTA 8o

CHIENGI MPULUNGU

MBALA LUNZUA KUNDABWIKA (0.75MW) (101MW) KASHIKISHI MPOROKOSO NAKONDE NCHELENGE KABWELUME D R (62MW) Kawambwa KALUNGWISHI RIVER Town MBERESHI KAWAMBWA CHISHIMBA FALLS CONGO TEA MAMBILIMA KASAMA ISOKA Chambasitu MUSONDA FALLS LUWINGU (5MW) MUYOMBE CHINSALI

MWINILUNGA MANSA CHAMA MICHELO SAMFYA WEST LUNGA KANSANSHI MPIKA at West Lunga River MOMBUTUTA (2.5MW) SOLWEZI LUMWANA ANGOLA LUANO KANSUSWA KABOMPO Gorge (Mine) PENSUL (34MW) O LUNDAZI KITWE BWANA LUSIWASI CHAVUMA MKUBWA (12MW) MUFUMBWE SERENJE MFUE MAPOSA LUSIWASI CHIKATA FALLS Mkushi EXTENSION (3.5MW) KASEMPA (40MW) Mkushi Central ZAMBEZI KAPIRI Mkushi KABOMPO MPOSHI Farm Block MPONGWE MSORO CHIPATA

LUNSEMFWA (18MW) AZELE KABWE MUMBWA MULUNGUSHI LUKULU ROMA (20MW) PETAUKE LUSAKA WEST Luangwa o KAOMA NAMPUNDWE CHONGWE Bridge 33.5 East COV. LEOPARDS HILL MOZAMBIQUE KALAB MONGU LUANGWA O KAFUE WEST KAFUE TOWN KAFUE LOWER KAFUE GORGE (750MW) 900MW(1080MW) EXISTING PROPOSED KARIBA NORTH CHIRUNDU POWER¥SUBSTATIONS POWER¥SUBSTATIONS MAZABUKA (600MW(750MW) AND POWER LINES AND POWER LINES SENANGA KARIBA NORTH ITEZHI – TEZHI EXTENSION SHANGOMBO (120MW) (600MW(750MW) 330kV 330kV KARIBA SOUTH MUZUMA LAKE KARIBA 220kV 220kV 132kV 132kV MAAMBA 88kV 88kV KATIMA SESHEKE VICTORIA 22o East MULILO FALLS 66kV 66kV DEVILS GORGE (108MW) (800MW) HYDRO POWERSTATION PROPOSED HYDROPOWERSTATION KATIMA SUBSTATION o MULILO 18 PROPOSED BATOKA GORGE DIESEL STATION SUBSTATION NAMIBIA (800MW) ZIMBABWE BOTSWANA PROPOSED Zambia: Africa’s New Frontier for Investments and Profits DIESEL STATION “Energy Opportunities would be Underestimated” Abundant investment Opportunities in view of •Huge power deficit in Southern Africa •Vast water resources and Coal reserves

East Africa short of power, South Current Installed Cap. Africa running out of Excess Power 1,970 Mw, Peak 1,600 Growth in demand 150MW – 200 MW Mw

Hydro projects – Potential Private Sector, Capacity to being considered 6,000 Mw

Zambia Tanzania Zambia Namibia Interconnector Interconnector

Zambia DRC Interconnector Zambia: Africa’s New Frontier for Investments and Profits ENERGY INVESTMENT OPPORTUNITIES • Biofuels Areas - Growing of energy crops, Setting up of Refinery to process the crops and Storage facilities • Renewable energy opportunities include biomass gasification, biogas, and wind energy for water pumping. • Manufacture of Solar Components – such as batteries, bulbs, regulators ENERGY INVESTMENT OPPORTUNITIES 1,600 KM ZAMBIA-TANZANIA-KENYA POWER INTER-CONNECTOR PROJECT •Construction of a 700 kilometres double circuit 440kV transmission line originating from Zambia and ending in Tanzania •Reinforcement of the Tanzania transmission system by construction a single circuit 400kV line from Mbeya to Arusha •Construction of a 260 kilometres 4000kV transmission line between Tanzania and Kenya.

Zambia: Africa’s New Frontier for Investments and Profits ENERGY INVESTMENT OPPORTUNITIES MUMBOTUTA AND MAMBILIMA HYDROELECTRIC PROJECT (850-1200MW) Scope of project could include: •301MW hydropower plant •Concrete faced rock fill dam •Surface “open-pit type powerhouse •Development of high voltage transmission line which will include transmission line to connect to the national grid and construction of a Copperbelt to Luapula transmission line ENERGY INVESTMENT OPPORTUNITIES • Biofuels Areas - Growing of energy crops, Setting up of Refinery to process the crops and Storage facilities • Renewable energy opportunities include biomass gasification, biogas, and wind energy for water pumping. • Manufacture of Solar Components – such as batteries, bulbs, regulators “Opportunities in Rail Infrastructure”

Total projected investment US300 million Inter-mine railway network covers a total of 199Km: Ndola to Chingola 134Km Luano to Chililabombwe 31Km Spur to Mufulira 34Km

Zambia: Africa’s New Frontier for Investments and Profits “Opportunities in Road Infrastructure”

Total projected investment USD2 billion Trunk roads comprising (i) Livingstone – Kapiri Mposhi, 678km (ii) Kapiri Mposhi – Nakonde, 808km and (iii) Kapiri Mposhi, 746km

Zambia: Africa’s New Frontier for Investments and Profits Key Taxes

TAXES GENERAL MINING AGRIC ZDA INCENTIVES

0% - for 5years 50% of Tax – year 6-8 Corporate Tax 35% 30% 10% 75% of tax – year 9-10 Full tax afterwards

Withholding Tax 15 % ( Except for mining – O%) Option to deferment on capital Value Added Tax 16% equipment and machinery

Import Duties

Capital goods and Raw 0-5% 0% on capital goods, machinery material and equipment for 5 years Intermediate Goods 15% Finished goods 25% Dividends Income tax rates applicable 0% for 5 years

Zambia: Africa’s New Frontier for Investments and Profits A-to-Z information on the Zambian market

Guidance through the entire investment process and aftercare

Provision of matching Zambia partners and building contact networks Zambia Development Agency Global export market information Privatisation House, Nasser RD & product development P.O. Box 30819, LUSAKA. ZAMBIA

SME & business development Tel: +260 211 220177 services Fax: +260 211 225270

www.zda.org.zm