58404 v2 The Zambezi River Basin A Multi-Sector Investment Opportunities Analysis Volume 2 Basin Development Scenarios THE WORLD BANK The Zambezi River Basin A Multi-Sector Investment Opportunities Analysis Volume 2 Basin Development Scenarios June 2010 THE WORLD BANK WATER RESOuRcES MANAgEMENT AfRicA REgiON © 2010 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of the International Bank for Reconstruction and Development/The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Cover and interior design: The Word Express Cover photos: © Photographer Len Abrams/World Bank © Photographer Marcus Wishart/World Bank © Photographer Vahid Alavian/World Bank Contents Acknowledgments..................................................................................................................................... xi AbbreviAtions.And.Acronyms................................................................................................................xiii 1.. the.ZAmbeZi.river.bAsin:.bAckground.And.context. ...................................................................1 1.1 Motivation for This Analysis ................................................................................................................. 1 1.2 Summary of Findings ............................................................................................................................. 3 1.3 Basic Characteristics of the Zambezi River Basin ............................................................................... 3 1.4 Population and Economy ....................................................................................................................... 7 1.5 Approach and Methodology .................................................................................................................. 7 1.5.1 Analytical framework .................................................................................................................. 8 1.5.2 The River/Reservoir System Model ............................................................................................. 9 1.5.3 The Economic Assessment Tool ..................................................................................................11 2.. the.development.scenArios.............................................................................................................13 2.1 Scenario 0: Base Case ­ Current Situation .......................................................................................... 15 2.2 Scenario 1: Coordinated Operation of Existing Hydropower Facilities ........................................ 16 2.3 Scenario 2: Development of SAPP Hydropower Plans .................................................................... 17 2.4 Scenario 2A: SAPP with E-Flows ........................................................................................................ 19 2.5 Scenario 2B: SAPP, E-Flows and Coordination (4 clusters) ................................................................ 21 2.6 Scenario 2C: SAPP, E-Flows and Coordination (2 clusters) ............................................................. 24 2.7 Scenario 2D: SAPP, E-Flows and Coordination (1 system).............................................................. 25 2.7.1 Benefits of coordinated operation of HPPs................................................................................. 26 2.8 Scenario 3: Identified Irrigation Projects ........................................................................................... 29 2.8.1 Impact on total average irrigation area ..................................................................................... 32 2.8.2 Impact on employment .............................................................................................................. 35 2.8.3 Impact on energy production .................................................................................................... 35 2.8.4 Impact on NPV .......................................................................................................................... 35 2.9 Scenario 4: High-Level Irrigation Development ............................................................................... 36 2.9.1 Impact on total irrigation area .................................................................................................. 38 2.9.2 Impact on employment .............................................................................................................. 39 2.9.3 Impact on energy production ..................................................................................................... 39 2.9.4 Impact on NPV .......................................................................................................................... 40 2.10 Scenario 5: SAPP Hydropower Plans and Identified Irrigation Projects ..................................... 40 2.11 Scenario 5A: SAPP Hydropower Plans and Coordinated Identified Irrigation Projects .......... 42 2.12 Scenario 6: SAPP Hydropower plans and High-Level Irrigation Development ........................ 48 iii The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis 2.13 Scenario 6A: SAPP Hydropower plans and Coordinated High-Level Irrigation Development ...................................................................................................................... 51 2.14 Scenario 7: SAPP Hydropower, Identified Irrigation Projects and Other Projects..................... 52 2.14.1 Other projects: water abstraction for urban water supply and mining................................... 52 2.14.2 Impact on energy production ................................................................................................... 55 2.14.3 Impact on NPV ........................................................................................................................ 56 2.15 Scenario 8: Multi-Sector Development ............................................................................................ 57 2.16 Scenario 9: Potential Impact of Climate Change ............................................................................ 59 2.17 Scenarios 10A­10F: Partial Restoration of Natural Floods in Lower Zambezi ......................... 61 2.18 Scenarios 11A­11G: Flood Protection in Lower Zambezi ............................................................. 65 2.19 Inflow Sensitivity Analysis................................................................................................................. 68 3.. summAry.of.findings.........................................................................................................................71 3.1 Energy Production ................................................................................................................................. 71 3.2 Irrigation ................................................................................................................................................. 71 3.3 Other Abstractions and Supplementary Regulation ....................................................................... 78 3.4 Economic Assessment ........................................................................................................................... 80 3.5 Conclusion .............................................................................................................................................. 81 references...................................................................................................................................................85 Tables Table 1.1. Precipitation data for the Zambezi River Basin .............................................................................. 4 Table 1.2. Population of the Zambezi River Basin (in thousands, 2005­06 data)......................................... 7 Table 1.3. Macroeconomic data by country (2006) ........................................................................................... 8 Table 2.1. Development scenarios .................................................................................................................... 14 Table 2.2. Benefits of coordinated operation of existing HPPs ..................................................................... 16 Table 2.3. Net present value by country (US$ m): Scenario 1 compared with Scenario 0 ........................ 17 Table 2.4. SAPP HPPs development: Scenario 2 compared with Scenario 0 ............................................. 18 Table 2.5. Sensitivity to firm energy value ....................................................................................................... 19 Table 2.6. Net present value by country (US$ m): Scenario 2 compared with Scenario 0 ........................ 19 Table 2.7. Minimum flow levels in major tributaries of the Zambezi River Basin .................................... 20 Table 2.8. SAPP HPPs development with E-flow rules: Scenario 2A compared with Scenario 2 (energy) and compared with Scenario 0 (NPV) ........................................................................... 20 Table 2.9. Net present value by country (US$ m): Scenario 2A compared with Scenario 0 ..................... 21 Table 2.10. SAPP HPP development, E-flow rules and Coordination (4 clusters): Scenario 2B compared with Scenario 2A ............................................................................................................. 22 Table 2.11. Net present value by country (US$ m): Scenario 2B compared with Scenario 2A................... 23 Table 2.12. SAPP HPP development, E-flow rules and Coordination (2 clusters): Scenario 2C compared with Scenario 2B .............................................................................................................. 24 Table 2.13. SAPP HPP development, E-flow rules and Full Coordination (1 cluster): Scenario 2D compared with Scenario 2C ............................................................................................................. 26 Table 2.14. Net present value by country (US$ m): Scenario 2D compared with Scenario 2C .................. 27 Table 2.15. Summary of energy generated in Scenario 0­Scenario 2D ......................................................... 27 Table 2.16. Future firm energy production by HPPs under SAPP in the Zambezi River Basin ................ 30 Table 2.17. Future energy production in the Zambezi River Basin ................................................................ 31 iv Contents Table 2.18. Current irrigation areas in Zambezi River Basin, by subbasin and country: Scenario 0......... 33 Table 2.19. Identified irrigation projects (additional hectares to current irrigated area) ............................ 33 Table 2.20. Supplementary regulation requirements for identified projects in Scenario 3 ......................... 34 Table 2.21. Impact on employment by country (person years): Scenario 3 .................................................. 35 Table 2.22. Impact on energy production: Scenario 3 compared with Scenario 0........................................ 35 Table 2.23. Net present value by subbasin and country (US$ m): Scenario 3 compared with Scenario 0 ................................................................................................................................... 37 Table 2.24. Additional high-level irrigation areas (ha) compared with IPs by subbasin and country......................................................................................................................................... 38 Table 2.25. Supplementary regulation requirements for high-level irrigation projects in Scenario 4 ............................................................................................................................................ 39 Table 2.26. Impact on employment by subbasin (person years): Scenario 4 ................................................ 39 Table 2.27. Impact on energy production: Scenario 4 compared to Scenario 0 ............................................ 40 Table 2.28. Net present value by subbasin and country (US$ m): Scenario 4 compared to Scenario 0 ............................................................................................................................................ 41 Table 2.29. Impact of IPs on HPP energy generation under SAPP: Scenario 5 compared with Scenario 2A ......................................................................................................................................... 42 Table 2.30. Supplementary regulation requirements in Scenarios 5 and 5A ................................................ 42 Table 2.31. Net present value by subbasin and country (US$ m): Scenario 5 compared with Scenario 2A ........................................................................................................................................ 43 Table 2.32. Total additional irrigated and equipped area (ha) from IPs: Scenario 5A compared with Scenario 5 ................................................................................................................................... 44 Table 2.33. Dry season, Perennial and Wet season crops per subbasin: Scenario 5A compared with Scenario 5 ................................................................................................................................... 45 Table 2.34. Dry season, Perennial and Wet season crops per country: Scenario 5A compared with Scenario 5 ................................................................................................................................... 46 Table 2.35. Impact of IPs with coordination on HPP energy generation under SAPP: Scenario 5A compared with Scenario 5 .......................................................................................... 47 Table 2.36. Net present value by subbasin and country (US$ m): Scenario 5A compared with Scenario 5 ............................................................................................................................................ 48 Table 2.37. Impact of high-level irrigation on HPP energy generation under SAPP without any coordination: Scenario 6 compared with Scenario 2A.................................................................. 49 Table 2.38. Supplementary regulation requirements in Scenarios 6 and Scenario 6A ................................ 49 Table 2.39. Net present value by subbasin and country (US$ m): Scenario 6 compared with Scenario 2A ........................................................................................................................................ 50 Table 2.40. Impact of coordinated high-level irrigation on HPP energy generation under SAPP: Scenario 6A compared with Scenario 6 .......................................................................................... 51 Table 2.41. Net present value by subbasin and country (US$ m): Scenario 6A compared with Scenario 6 ............................................................................................................................................ 53 Table 2.42. Water consumption at mines and thermal power stations .......................................................... 54 Table 2.43. Impact on energy production by other projects: Scenario 7 compared with Scenario 5 ........ 55 Table 2.44. Impact on energy production by other projects and IPs: Scenario 7 compared with Scenario 2A ......................................................................................................................................... 55 Table 2.45. Net present value by subbasin and country (US$ m): Scenario 7 compared with Scenario 2A ........................................................................................................................................ 57 Table 2.46. Supplementary regulation requirements in Scenarios 8 and Scenario 9 ................................... 58 Table 2.47. Impact on energy production in a multi-sector development context: Scenario 8 compared with Scenario 2A ............................................................................................................ 58 v The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.48. Net present value by subbasin and country: Scenario 8 compared with Scenario 2A ............ 60 Table 2.49. Estimated impact of climate change in the Zambezi River Basin by 2030 ................................ 60 Table 2.50. Impact on energy production by potential climate change in 2030: Scenario 9 compared with Scenario 8 ................................................................................................................ 61 Table 2.51. Impact on energy production by potential climate change in 2030: Scenario 9 compared with Scenario 2A ............................................................................................................. 62 Table 2.52. Net present value by subbasin and country (US$ m): Scenario 9 compared with Scenario 2A ......................................................................................................................................... 63 Table 2.53. Impact on energy production of Cahora Bassa Dam and the future Mphanda Nkuwa Dam: Scenario 2, Scenario 10A­F ..................................................................................... 64 Table 2.54. Net present value by flooding level (US$ m): Scenarios 10A­10F compared with Scenario 2 ................................................................................................................................... 65 Table 2.55. Impact on energy production of Cahora Bassa Dam and the future Mphanda Nkuwa Dam: Scenario 2, Scenario 10A­10F, 11A­11G ................................................................ 67 Table 2.56. Net present value of flood protection levels (US$ m): Scenarios 11A­11G compared with Scenario 2A and 10A­10F ........................................................................................................ 68 Table 2.57. Sensitivity analysis on energy production: Scenario 8 ................................................................ 69 Table 3.1. Summary of findings: Scenario 0 ­ Scenario 8 .............................................................................. 72 Table 3.2. Total average irrigated area and total equipped area (ha/year): Scenario 0­8......................... 79 Table 3.3. Supplementary regulation requirements: Scenario 0, Scenario 3 to Scenario 8........................ 80 Table 3.4. Net present value (US$ m) and employment potential (jobs per year): Scenarios 1­8 .......... 81 Figures Figure 1.1. The Zambezi River Basin and its 13 subbasins .............................................................................. 5 Figure 1.2. Schematic of the Zambezi River with deregulated mean annual discharge (m3/s) and runoff (mm) ................................................................................................................................. 6 Figure 1.3. Zambezi River Basin: scenario analysis matrix ............................................................................. 9 Figure 1.4. Schematic of the river/reservoir system model for the Zambezi River Basin ....................... 10 Figure 1.5. Schematic of the elements of the economic analysis tool ........................................................... 12 Figure 2.1. Net present value by country (US$ m): Scenario 1 compared with Scenario 0 ....................... 17 Figure 2.2. Net present value by country (US$ m): Scenario 2 compared with Scenario 0 ....................... 19 Figure 2.3. Net present value by country (US$ m): Scenario 2A compared with Scenario 0 .................... 21 Figure 2.4. Net present value by country (US$ m): Scenario 2B compared with Scenario 2A ................ 24 Figure 2.5. Net present value by country (US$ m): Scenario 2D compared with Scenario 2C ................ 27 Figure 2.6. Summary of firm energy generated in Scenario 0 ­ Scenario 2D ............................................. 28 Figure 2.7. Total Net Present Value of hydropower: Scenario 1, 2, and 2A­2D .......................................... 28 Figure 2.8. Change in firm energy production: from Scenario 2A to 2D ..................................................... 29 Figure 2.9. Estimated total average irrigated area per country: Scenario 3 with current irrigation area and Identified Projects............................................................................................................. 32 Figure 2.10. Impact on employment by country (person years): Scenario 3 ................................................. 35 Figure 2.11. Net present value by subbasin (US$ m): Scenario 3 compared with Scenario 0 ..................... 36 Figure 2.12. Net present value by country (US$ m): Scenario 3 compared with Scenario 0 ....................... 36 Figure 2.13. Estimated additional total average irrigated area in Scenario 4: current situation, identified projects and high-level irrigation development ........................................................ 39 Figure 2.14. Impact on employment by country (person years): Scenario 4 ................................................. 39 vi Contents Figure 2.15. Net present value by subbasin (US$ m): Scenario 4 compared to Scenario 0 ......................... 40 Figure 2.16. Net present value by country (US$ m): Scenario 4 compared to Scenario 0 ........................... 40 Figure 2.17. Net present value by subbasin (US$ m): Scenario 5 compared with Scenario 2A .................. 43 Figure 2.18. Net present value by country (US$ m): Scenario 5 compared with Scenario 2A.................... 43 Figure 2.19. Net present value by subbasin (US$ m): Scenario 5A compared with Scenario 5 .................. 47 Figure 2.20. Net present value by country (US$ m): Scenario 5A compared with Scenario 5 .................... 47 Figure 2.21. Net present value by subbasin (US$ m): Scenario 6 compared with Scenario 2A .................. 50 Figure 2.22. Net present value by country (US$ m): Scenario 6 compared with Scenario 2A.................... 50 Figure 2.23. Net present value by subbasin (US$ m): Scenario 6A compared with Scenario 6 .................. 52 Figure 2.24. Net present value by country (US$ m): Scenario 6A compared with Scenario 6 .................... 52 Figure 2.25. Net present value by subbasin (US$ m): Scenario 7 compared with Scenario 2A .................. 56 Figure 2.26. Net present value by country (US$ m): Scenario 7 compared with Scenario 2A.................... 56 Figure 2.27. Net present value by subbasin (US$ m): Scenario 8 compared with Scenario 2A .................. 59 Figure 2.28. Net present value by country (US$ m): Scenario 8 compared with Scenario 2A.................... 59 Figure 2.29. Net present value by subbasin (US$ m): Scenario 9 compared with Scenario 2A .................. 62 Figure 2.30. Net present value by country (US$ m): Scenario 9 compared with Scenario 2A.................... 62 Figure 2.31. Scenario 10A­10F: Flooding characteristics ................................................................................. 63 Figure 2.32. Impact on the energy production of Cahora Bassa HPP: Scenario 2, 10A­10F ....................... 64 Figure 2.33. Impact on the energy production of the planned Mphanda Nkuwa HPP: Scenario 2, 10A­10F ............................................................................................................................................. 64 Figure 2.34. Scenario 11A­11G: flood protection characteristics..................................................................... 65 Figure 2.35. Impact on the energy production of Cahora Bassa HPP: Scenario 11A­11G compared with Scenario 10A­10F ................................................................................................. 66 Figure 2.36. Impact on the energy production of the planned Mphanda Nkuwa HPP: Scenario 11A­11G compared with Scenario 10A­10F ................................................................. 66 Figure 3.1. Firm energy production: Scenario 0­Scenario 8 ......................................................................... 78 Figure 3.3. Water abstractions (million m3/year): Scenario 0, Scenario 3 to 8 ............................................ 78 Figure 3.2. Average energy production: Scenario 0 ­ Scenario 8 ................................................................. 78 Figure 3.4. Summary of economic analysis: Net present value and employment results by development scenario (compare to current situation) ................................................................ 81 Figure 3.5. Potential for energy generation and irrigation by development scenario ............................... 82 vii Currency Equivalents and Units Currency Equivalents Against U.S. dollar Angolan Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe new kwanza pula Euro kwacha metical dollar schilling kwacha dollar Kz P MK Mt N$ T Sh K Z$ 2000 5.94 5.09 1.08 47.10 15.41 6.95 799.27 2,830.00 44.40 2001 11.51 5.72 1.12 70.03 20.33 8.62 876.59 2,845.37 55.26 2002 32.41 6.26 1.06 76.24 23.24 10.52 965.27 4,360.81 55.29 2003 57.65 4.91 0.89 95.24 23.31 7.57 1,036.79 4,841.94 577.19 2004 57.65 4.68 0.80 106.74 22.03 6.46 1,088.20 4,750.53 4,499.18 2005 74.90 5.11 0.80 116.84 22.85 6.36 1,125.36 4,432.60 21,566.90 2006 86.85 5.83 0.80 135.54 25.93 6.77 1,251.28 3,586.09 58,289.86 2007 77.38 6.15 0.73 139.72 25.56 7.06 1,241.24 3,996.41 9,296.66 2008 74.97 6.84 0.68 140.91 24.14 8.25 1,199.75 3,746.63 2,638,293,338 2009 77.97 7.14 0.72 141.75 26.87 8.43 1,324.34 5,049.15 21,830,975.04 Units 1 km3 = 1,000 hm3 = 1 billion m3 1 m3/s = 31.54 hm3/year = 0.033 km3/year 1 l/s/ha = 86.4 m3/day/ha = 8.6 mm/day 1 gigawatt hour (GWh) = 1,000 MWh = 1,000,000 KWh = 1,000,000,000 Wh 1 km2 = 100 ha Unless otherwise specified, the symbol $ refers to U.S. dollars. ix Acknowledgments This report provides a summary of the series of reports development partners. Their participation and input and documents prepared to assess the water resources at the regional meeting in Gaborone, Botswana in July development options and benefits of cooperation among 2009, and at the eight national consultation workshops the riparian countries in the Zambezi River Basin. The held between September and December 2009 is much effort was led by a Bank Team consisting of Vahid Ala- appreciated. The financial contribution and support vian (Team Leader), Marcus Wishart, Louise Croneborg, from the Swedish International Development Coopera- Rimma Dankova, K. Anna Kim, and Lucson Pierre- tion Agency (Sida) and the Government of Norway are Charles. The initial Team Leader for this work was Len acknowledged with appreciation. Abrams, now retired. The Multi-Sector Investment Op- The World Bank peer reviewers for this work in- portunities Analysis is based on a series of reports and cluded Stephen Mink, Glenn Morgan, Daryl Fields, and model simulations prepared by a consortium of BRLi and Guy Alaerts. Francois Onimus also provided written Niras. The consultants served as partners and members comments. Their constructive inputs are very much of the team during the course of this work. appreciated. The team benefitted from the guidance of The Team gratefully acknowledges the contributions Rick Scobey, Acting Director for Regional Integration, by representatives of the riparian countries of the Zam- Inger Andersen, Director for Sustainable Development, bezi River Basin, the Southern Africa Development Com- and Ashok K. Subramanian, Sector Manager for Water munity (SADC) Water Division, and other international Resources Management, Africa Region. xi Abbreviations and Acronyms AAP Africa Action Plan ACP Agricultural Commercialization Program (Zambia) AF artificial flooding AMD acid mine drainage AMU Arab Maghreb Union ARA Administração Regional de Águas (Regional Water Administrations, Mozambique) ASDP Agricultural Sector Development Program (Tanzania) ASDS Agricultural Sector Development Strategy (Tanzania) AU African Union BIPP bankable investment project profile BOD biological oxygen demand BOS Bureau of Standards BPC Botswana Power Corporation CAADP Comprehensive Africa Agriculture Development Program CBA cost benefit analysis CEC Copperbelt Energy Corporation PLC CEMAC Central African Economic and Monetary Community CEN-SAD Community of Sahel-Saharan States CEPGL Economic Community of the Great Lakes Countries COMESA Common Market for Eastern and Southern Africa CPC Climate Prediction Center CPFAT Centro Provincial de Formação Agrária de Tete (Mozambique) CRU Climate Research Unit CS current situation CSCO current situation with coordinated operation CSNC current situation without coordinated operation CVRD Companhia Vale do Rio Doce (Brazil) DMC Drought Monitoring Center DMU Disaster Management Unit DNA Direcção Nacional de Águas (National Directorate of Water, Mozambique) DNSA Direcção Nacional de Extensão Agrária (National Directorate of Agrarian Services, Mozambique) DPA Provincial Directorate of Water DRC Democratic Republic of Congo DSS decision support system DWA Department of Water Affairs DWAF Department of Water Affairs and Forestry EAC East African Community ECCAS Economic Community of Central African States ECMWF European Center for Medium Range Weather Forecast ECOWAS Economic Community of West African States ECP Estratégia de Combate à Pobreza (Poverty Reduction Strategy, Angola) ECZ Environmental Council of Zambia EdM Electricidade de Moçambique (Electricity of Mozambique, Mozambique) EIA Environmental Impact Assessment xiii The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis EIRR economic internal rate of return ENE Empresa Nacional de Electricidad (National Electricity Company, Angola) ESCOM Electricity Supply Corporation of Malawi ESIA Environmental and Social Impact Assessment ETo reference evapotranspiration ETP evapotranspiration EU European Union EUMETSAT European Organization for the Exploitation of Meteorological Satellites EUS epizootic ulcerative syndrome FAO Food and Agriculture Organization FSL full supply level GDP gross domestic product GMA Game Management Area GPZ Gabinete do Plano de Desenvolvimento da Região do Zambeze (Office of Development Planning for the Zambezi Region, Mozambique) GWh gigawatt hour ha hectare HCB HidroEléctrica de Cahora Bassa (Cahora Bassa Hydroelectrics, Mozambique) HEC Hydrologic Engineering Center HIPC Heavily Indebted Poor Countries Initiative HLI high-level irrigation HLIC HLI with cooperation hm3 Cubic hectometer HPP hydropower plant HRWL high reservoir water level HYCOS hydrological cycle observation system I&C information and communication IBRD International Bank for Reconstruction and Development ICM Integrated Committee of Ministers ICTs information and communication technologies IDF irrigation development fund IGAD Inter-Governmental Authority on Development IMF International Monetary Fund INAM Instituto Nacional de Meteorologia (National Institute of Meteorology, Mozambique) IOC Indian Ocean Commission IP identified project (for irrigation) IPC IP with cooperation IPCC Intergovernmental Panel on Climate Change IRR internal rate of return ITT Itezhi Tezhi Dam IUCN International Union for Conservation of Nature IWRM integrated water resources management JICA Japan International Cooperation Agency JOTC Joint Operation Technical Committee KAZA TFCA Kavango-Zambezi Transfrontier Conservation Area kg/ha kilogram per hectare KGL Kafue Gorge Lower Dam KGU Kafue Gorge Upper Dam km3 cubic kilometers KWh kilowatt hour l/s liters per second LEC Lesotho Electricity Corporation LRRP Land Reform and Resettlement Program (Zimbabwe) LRWL low reservoir water level LSL low supply level m3/s cubic meters per second MACO Ministry of Agriculture and Cooperatives (Zambia) MAP mean annual precipitation MAWF Ministry of Agriculture, Water and Forestry xiv Abbreviations and Acronyms MASL minimum active storage level MDG Millennium Development Goal MDRI Multilateral Debt Relief Initiative MEA Ministry of Energy and Water MERP Millennium Economic Recovery Program (Zimbabwe) MFL minimum flow level mg/l milligrams per liter MKUKUTA Poverty Reduction Strategy for Mainland Tanzania (kiswahili acronym) mm/yr millimeters per year MMEWR Ministry of Minerals, Energy and Water Resources MOL minimum operating level MOPH Ministry of Public Works and Housing MoU memorandum of understanding MPRSP Malawi Poverty Reduction Strategy Paper MRU Mano River Union MSIOA Multi-Sector Investment Opportunities Analysis MW megawatt MWh megawatt hour NAMPAADD National Master Plan for Arable Agriculture and Dairy Development (Botswana) NAP national agriculture policy NDMO National Disaster Management Office NDP(s) national development plan(s) NDP2 National Development Plan 2 NEPAD New Partnership for Africa's Development NERP National Economic Revival Program (Zimbabwe) NIP national irrigation plan NMHS National Meteorological and Hydrological Services NMTIPs national medium-term investment programs NOAA National Oceanic and Atmospheric Administration NPV net present value NSC north­south carrier NSC National Steering Committee NSGRP National Strategy for Growth and Reduction of Poverty (Tanzania) NWSDS National Water Sector Development Strategy (Tanzania) ODA official development assistance OWE open water evaporation PAEI Política Agrária e Estratégias de Implementação (Agriculture Policy and Implementation Strategy, Mozambique) PAR population at risk PARPA Plano de Acção para a Redução da Pobreza Absoluta (Poverty Reduction Support Strategy, Mozambique) PARPA II Plano de Acção para a Redução da Pobreza Absoluta II (2nd Poverty Reduction Support Strategy, Mozambique) PASS II Poverty Assessment Study Survey II PFM public financial management PPEI Política Pesqueira e Estratégias de Implementação (Fishery Policy and Implementation Strategy, Mozambique) ppm parts per million PPP purchasing power parity ProAgri Promoção de Desenvolvimento Agrário (National Agricultural Development Program, Mozambique) PRSP poverty reduction strategy paper PSIP program and system information protocol RBO river basin organization RBZ Reserve Bank of Zimbabwe RCC roller-compacted concrete REC regional economic communities RIAS Regional Integration Assistance Strategy R-o-R run-of-the-river RSA Republic of South Africa RSAP Regional Strategic Action Plan SACU Southern African Customs Union SADC Southern African Development Community SADC-WD SADC Water Division xv The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis SAPP Southern African Power Pool SARCOF Southern African Climate Outlook Forum SEA strategic environmental assessment SEB Swaziland Electricity Board SEDAC Socioeconomic Data and Applications Center SIDA Swedish International Development Cooperation Agency SIGFE Sistema Integrado de Gestão Financeira do Estado (Integrated Financial Management System, Angola) SMEC Snowy Mountains Engineering Corporation SNEL Société Nationale d'Électricité (National Electricity Company, Democratic Republic of Congo) SSIDS small-scale irrigation development study SWOT strengths, weaknesses, opportunities, and threats t/yr tons/year TANESCO Tanzania Electric Supply Company TVA Tennessee Valley Authority (United States) TWL tail water level UK United Kingdom UN/ISDR United Nations Inter Agency International Strategy for Disaster Reduction UNDP United Nations Development Program UNECA United Nations Economic Commission for Africa UNESCO United Nations Educational, Scientific and Cultural Organization US$ United States dollar USAID United States Agency for International Development USGS U.S. Geological Survey VSAM Visão do Sector Agrário em Moçambique (Mozambique) WAEMU West African Economic and Monetary Union WAP Water Apportionment Board WASP Web Analytics Solution Profiler WFP World Food Program WHO World Health Organization WMO World Meteorological Organization WRC Water Resources Commission WTO World Trade Organization WTTC World Travel and Tourism Council ZACBASE Zambezi River database ZACPLAN Action Plan for the Environmentally Sound Management of the Common Zambezi River System ZACPRO Zambezi Action Project ZAMCOM Zambezi River Watercourse Commission ZAMFUND Zambezi Trust Fund ZAMSEC ZAMCOM Secretariat ZAMSTRAT Integrated Water Resources Management Strategy and Implementation Plan for the Zambezi River Basin ZAMTEC ZAMCOM Technical Committee ZAMWIS Zambezi Water Information System ZAPF Zimbabwe's Agriculture Policy Framework ZCCM Zambia Consolidated Copper Mines Ltd ZESA Zimbabwe Electricity Supply Authority ZESCO Zambia Electricity Supply Corporation ZINWA Zimbabwe National Water Authority ZRA Zambezi River Authority ZRB Zambezi River Basin ZVAC Zambia Vulnerability Assessment Committee xvi 1 The Zambezi River Basin: Background and Context The Zambezi River Basin (ZRB) is one of the most diverse and valu- able natural resources in Africa. Its waters are critical to sustainable economic growth and poverty reduction in the region. In addition to meeting the basic needs of some 30 million people and sustaining a rich and diverse natural environment, the river plays a central role in the economies of the eight riparian countries--Angola, Botswana, Malawi, Mozambique, Namibia, Tanzania, Zambia, and Zimbabwe. It provides important environmental goods and services to the region and is essential to regional food security and hydropower production. Because the Zambezi River Basin is characterized by extreme climatic variability, the River and its tributaries are subject to a cycle of floods and droughts that have devastating effects on the people and econo- mies of the region, especially the poorest members of the population. 1.1 MoTivaTionForThisanalysis Despite the regional importance of the ZRB, few improvements have been made in the management of its water resources over the past 30 years. Differences in post-independence development strategies and in the political economy of the riparian countries, as well as the diverse physical characteristics of the Basin, have led to approaches to water resources development that have remained primarily unilateral. Better management and cooperative development of the Basin's water resources could significantly increase agricultural yields, hy- dropower outputs, and economic opportunities. Collaboration has the potential to increase the efficiency of water use, strengthen envi- ronmental sustainability, improve regulation of the demands made on natural resources, and enable greater mitigation of the impact of droughts and floods. Seen in this light, cooperative river basin development and management not only provide a mechanism for increasing the productivity and sustainability of the river system, but also provide a potential platform for accelerated regional economic growth, cooperation, and stability within the wider Southern Africa Development Community (SADC). 1 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis The World Bank, other international finan- be expected from cooperative as opposed to cial institutions and development partners have unilateral development of irrigation schemes? a diverse portfolio of investments and support · Flood management, particularly in the Lower Zam- programs in the countries that share the ZRB. Still bezi and the Zambezi Delta. What options exist to lacking, however, is a sound analytical foundation permit partial restoration of natural floods and for a coordinated strategy that can optimize the Ba- to reduce flood risks downstream from Cahora sin's investment potential and promote cooperative Bassa Dam? How would those options affect the development in support of sustainable economic use of the existing and potential hydropower and growth and poverty alleviation. irrigation infrastructure on the Zambezi River? The overall objective of the Zambezi River Multi- · Effects of other projects using the waters of the Sector Investment Opportunity Analysis (MSIOA) Zambezi River (e.g., transfers out of the Basin is to illustrate the benefits of cooperation among the for industrial uses). How might these projects riparian countries in the ZRB through a multi-sectoral affect the environment (wetlands), hydropower, economic evaluation of water resources develop- irrigation, and tourism? ment, management options and scenarios--from both national and basin-wide perspectives. The Within the context of an integrated approach analytical framework was designed in consultation to the development and management of water with the riparian countries, SADC Water Division resources, all water-related sectors are important. (SADC-WD) and development partners in line with This analysis, however, focuses on hydropower and the Zambezi Action Plan Project 6, Phase II (ZACPRO irrigation because of their special potential to stimu- 6.2). It is hoped that the findings, together with the late growth in the economies of the region. Other Integrated Water Resources Management Strategy demands for water--for potable water, environmen- and Implementation Plan for the Zambezi River Ba- tal sustainability, tourism, fisheries, and navigation, sin that was developed under ZACPRO 6.2 (2008), for example--are assumed as givens. Limitations of would contribute to development, environmental assigning economic value to non-economic water sustainability, and poverty alleviation in the region. users, such as ecosystems, are noted. To the degree In this analysis, the following development paths allowed by the available, published information, they have been assessed through a series of scenarios. are incorporated into the analysis as non-negotiable. The initial findings and the various drafts of · Coordinated operation of existing hydropower facili- this analysis were discussed at a regional workshop ties, either basin-wide or in clusters. By how much and at individual country consultations with all could hydropower generation increase if existing riparian countries. Also involved in these consulta- projects were coordinated? What is the potential tions were SADC, the international development impact of coordination on other water users? partners active in the Basin, and other interested · Development of the hydropower sector as envisioned parties. The final draft version was shared with in plans for the Southern African Power Pool the riparian countries as well for comments before (SAPP). What is the development potential of finalization. The Swedish International Develop- the hydropower sector? How would its expan- ment Cooperation Agency and the Government of sion affect the environment (wetlands in par- Norway provided financial support. ticular), irrigation, tourism, and other sectors? This report consists of four volumes: What gains could be expected from the coordi- nated operation of new hydropower facilities? Volume 1: Summary Report · Development of the irrigation sector through uni- Volume 2: Basin Development Scenarios lateral or cooperative implementation of projects Volume 3: State of the Basin identified by the riparian countries. How might Volume 4: Modeling, Analysis, and Input Data the development of irrigation affect the envi- ronment (wetlands), hydropower, tourism, and This section (1.1­1.5) appears as an introduction other sectors? What incremental gain could to all four volumes. 2 The Zambezi River Basin: Background and Context 1.2 suMMaryoFFindings the Basin) would not have a significant effect on productive (economic) use of the water in the system The ZRB and its rich resources present ample at this time. But they might affect other sectors and opportunities for sustainable, cooperative invest- topics, such as tourism and the environment, espe- ment in hydropower and irrigated agriculture. cially during periods of low flow. A more detailed With cooperation and coordinated operation of the study is warranted. existing hydropower facilities found in the Basin, For the Lower Zambezi, restoration of natural firm energy generation can potentially increase by flooding, for beneficial uses in the Delta, including seven percent, adding a value of $585 million over a fisheries, agriculture, environmental uses and bet- 30-year period with essentially no major infrastruc- ter flood protection, could be assured by modify- ture investment. ing reservoir operating guidelines at Cahora Bassa Development of the hydropower sector accord- Dam. Depending on the natural flooding scenario ing to the generation plan of the SAPP (NEXANT selected, these changes could cause significant re- 2007) would require an investment of $10.7 billion duction in hydropower production (between three over an estimated 15 years. That degree of develop- percent and 33 percent for the Cahora Bassa Dam ment would result in estimated firm energy produc- and between four percent and 34 percent for the tion of approximately 35,300 GWh/year and average planned Mphanda Nkuwa Dam). More detailed energy production of approximately 60,000 GWh/ studies are warranted. year, thereby meeting all or most of the estimated Based on the findings for Scenario 8, which as- 48,000 GWh/year demand of the riparian countries. sumes full cooperation of the riparian countries, a With the SAPP plan in place, coordinated operation reasonable balance between hydropower and irriga- of the system of hydropower facilities can provide an tion investment could result in firm energy genera- additional 23 percent generation over uncoordinated tion of some 30,000 GWh/year and 774,000 hectares (unilateral) operation. The value of cooperative gen- of irrigated land. Those goals could be achieved eration therefore appears to be significant. while providing a level of flood protection and part Implementation of all presently identified na- restoration of natural floods in the Lower Zambezi. tional irrigation projects would expand the equipped The riparian countries together with their de- area by some 184 percent (including double crop- velopment partners may wish to act on the analysis ping in some areas) for a total required investment presented here by pursuing several steps, described of around $2.5 billion. However, this degree of in detail at the end of volume 1: development of the irrigation sector, without fur- ther development of hydropower, would reduce · Explore and exploit the benefits of cooperative hydropower generation of firm energy by 21 percent investments and coordinated operations; and of average energy by nine percent. If identified · Strengthen the knowledge base and the regional irrigation projects were developed alongside current capacity for river basin modeling and planning; SAPP plans, the resulting reduction in generation · Improve the hydrometeorological data system; would be about eight percent for firm energy and · Conduct studies on selected topics, including four percent for average energy. those mentioned above; and, Cooperative irrigation development (such as · Build institutional capacity for better manage- moving approximately 30,000 hectares of planned ment of water resources. large irrigation infrastructure downstream) could increase firm energy generation by two percent, with a net present value of $140 million. But com- 1.3 basiccharacTerisTicsoF plexities associated with food security and self-suf- TheZaMbeZiriverbasin ficiency warrant closer examination of this scenario. Other water-using projects (such as transfers The Zambezi River lies within the fourth-largest out of the Basin and for other industrial uses within basin in Africa after the Congo, Nile, and Niger 3 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis river basins. Covering 1.37 million km2, the Zambezi of the last remaining protected areas extensive River has its source in Zambia, 1,450 meters above enough to support large populations of large sea level. The main stem then flows southwest mammals. into Angola, turns south, enters Zambia again, · The Gorongosa/Cheringoma/Zambezi Delta area of and passes through the Eastern Caprivi Strip in central Mozambique, which covers an area of Namibia and northern Botswana. The Zambezi enormous habitat diversity not found in such River then flows through Mosi-oa-Tunya (Victoria close proximity elsewhere on the continent. Falls), shared by Zambia and Zimbabwe, before entering Lake Kariba, which masses behind Kariba The hydrology of the ZRB is not uniform, Dam, built in 1958. A short distance downstream with generally high rainfall in the north and lower from Kariba Dam, the Zambezi River is joined by rainfall in the south (table 1.1). In some areas in the the Kafue River, a major tributary, which rises in Upper Zambezi and around Lake Malawi/Niassa/ northern Zambia. The Kafue River flows through Nyasa, rainfall can be as much as 1,400 mm/year, the Copperbelt of Zambia into the reservoir behind while in the southern part of Zimbabwe it can be the Itezhi Tezhi Dam (ITT), built in 1976. From as little as 500 mm/year. there, the Kafue River enters the Kafue Flats and The mean annual discharge at the outlet of the then flows through a series of steep gorges, the site Zambezi River is 4,134 m3/s or around 130 km3/year of the Kafue Gorge Upper (KGU) hydroelectric (figure 1.2). Due to the rainfall distribution, north- scheme, commissioned in 1979. Below the Kafue ern tributaries contribute much more water than River confluence, the Zambezi River pools behind southern ones. For example, the northern highlands Cahora Bassa Dam in Mozambique, built in 1974. catchment of the Upper Zambezi subbasin contrib- Some distance downstream, the Zambezi River is utes 25 percent, Kafue River nine percent, Luangwa joined by the Shire River, which flows out of Lake River 13 percent, and Shire River 12 percent--for a Malawi/Niassa/Nyasa to the north. Lake Malawi/ total of 60 percent of the Zambezi River discharge. Niassa/Nyasa, which covers an area of 28,000 km2, is the third-largest freshwater lake in Africa. From the confluence, the Zambezi River travels some Table 1.1. Precipitation data for the 150 km, part of which is the Zambezi Delta, before Zambezi River Basin entering the Indian Ocean. The basin of the Zambezi River is generally de- Mean annual Subbasin No. precipitation (mm) scribed in terms of 13 subbasins representing major Kabompo 13 1,211 tributaries and segments (see map in figure 1.1). From a continental perspective, the ZRB con- Upper Zambezi 12 1,225 tains four important areas of biodiversity: Lungúe Bungo 11 1,103 Luanginga 10 958 · Lake Malawi/Niassa/Nyasa, a region of impor- Barotse 9 810 tance to global conservation because of the Cuando/Chobe 8 797 evolutionary radiation of fish groups and other Kafue 7 1,042 aquatic species. Kariba 6 701 · The swamps, floodplains, and woodlands of the Luangwa 5 1,021 paleo-Upper Zambezi in Zambia and northern Mupata 4 813 Botswana, including the areas of Barotseland, Busanga and Kafue, which along with the Ban- Shire River and Lake Malawi/ 3 1,125 Niassa/Nyasa gweulu are thought to be areas of evolutionary radiation for groups as disparate as Reduncine Tete 2 887 antelope, suffrutices, and bulbous plants. Zambezi Delta 1 1,060 · The Middle Zambezi Valley in northern Zimbabwe Zambezi River Basin, mean 956 and the Luangwa Valley in eastern Zambia, two Source: Euroconsult Mott MacDonald 2007. 4 Figure 1.1. The Zambezi River Basin and its 13 subbasins IBRD 37633R Mbeya Lake ZAMBEZI RIVER BASIN Tanganyika Lake RUMAKALI Mweru EXISTING HYDROPOWER PLANTS T A N Z A N I A Saurimo CAHORA BASSA 2,075 MW DEMOCRATIC REPUBLIC SONGWE I, II & III KARIBA 1,470 MW KAFUE GORGE UPPER 990 MW OF CONGO Kasama NKULA FALLS 124 MW AN G OL A LOWER FUFU Songea VICTORIA FALLS 108 MW TEDZANI 90 MW ZAMBIA Mansa a n gwa KAPICHIRA I 64 MW Mzuzu Lu ezi Lake PROJECTED HYDROPOWER PLANTS mb Lubumbashi Bangweulu Luena Za MPHANDA NKUWA* 2,000 MW BATOKA GORGE 1,600 MW 12 Solwezi 3 KAFUE GORGE LOWER** 600 MW Kafu e 5 Lake KHOLOMBIZO 240 MW 13 Lun Malawi/ SONGWE I, II & III 340 MW gú Lush Niassa/ 11 e Ndola Bu Nyasa iwa ng s RUMAKALI 256 MW Msan o po hi di r Lichinga e m ga 7 n LOWER FUFU 100 MW bo Lu Chipata Ka HYDROPOWER PLANT EXTENSIONS e ji a MA LAWI Mu s o n d w Busanga Lukanga gw hi Swamp Swamp an as HCB NORTH BANK 850 MW LILONGWE MOZAMBIQUE Lu k us 360 MW Cu KARIBA NORTH Lu ue Kaf an Kabwe d KARIBA SOUTH 300 MW o 10 Barotse Lunsemfwa Luangin ga Floodplain embeshi ITEZHI TEZHI 120 MW Menongue Mw HCB ir e KAPICHIRA II 64 MW Sh NORTH BANK Mongu Lake KHOLOMBIDZO Kafue Flats LUSAKA 4 Cahora Bassa CAHORA BASSA 5 Luena NKULA FALLS ZAMBEZI SUB-BASIN BOUNDARIES Flats TEDZANI ITEZHI TEZHI Blantyre 9 KAFUE GORGE UPPER KAFUE GORGE LOWER MAIN PLANNED WATER WITHDRAWALS Luiana MPHANDA NKUWA KAPICHIRA I KAPICHIRA II NATIONAL CAPITALS KARIBA Tete KARIBA NORTH Z am zoe Elephant MAJOR CITIES be KARIBA SOUTH Ma Marsh z Choma i K i INTERNATIONAL BOUNDARIES w an 2 Lupata MAAMBA Lake MOATIZE Gorge yan do COAL MINE Kariba BENGA Hun 8 Caprivi-Chobe COAL MINE Lower Shire Hydropower capacity estimates are based on the Southern Africa Power Pool, AND PLANT Wetlands Katima Za Nexant (2007) Study and updated as of 2010. Livingstone Quelimane Mulilo m b * The estimate for Mphanda Nkuwa has been increased to 2,000 MW HARARE Caia ez ** The estimates for Kafue Gorge Lower are 600 MW with the potential Rundu ati Kasane 6 i ny for an additional bay of 150 MW Li VICTORIA FALLS BATOKA GORGE 1 Umnia a Sh ti anga 0 25 50 100 200 Kilometers ni elt GOKWÉ D COAL FIRED Mutare zi POWER PLANT Chimoio be 0 50 100 150 Miles Tsumeb Za m Gweru G wai Beira N A M I B I A Maun CHOBE/ ZAMBEZI Bulawayo ZIMBABWE I N D I AN TRANSFER B O T S WA N A OC E AN ZAMBEZI RIVER SHIRE RIVER & BASIN ZAMBEZI DELTA TETE LAKE MALAWI/NIASSA/NYASA MUPATA LUANGWA KARIBA KAFUE 1 2 3 4 5 6 7 IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) CURRENT SITUATION (CS) 7,664 6,998 52,572 35,159 60,960 42,416 21,790 14,200 17,794 10,100 44,531 28,186 46,528 40,158 IDENTIFIED PROJECTS (IP) 106,774 84,053 108,193 65,495 162,126 101,927 30,356 20,060 28,857 16,230 228,919 147,778 67,048 53,768 UPPER LIMIT POTENTIAL (HLI) 231,774 184,053 508,193 265,495 766,755 451,927 30,356 20,060 73,814 41,230 948,825 591,578 104,448 78,768 8 CUANDO/CHOBE 9 BAROTSE 10 LUANGINGA 11 LUNGÚE BUNGO 12 UPPER ZAMBEZI 13 KABOMPO This map was produced by the Map Design Unit of The IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA IRRIGATED AREA EQUIPPED AREA World Bank. The boundaries, colors, denominations and (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) (ha/year) (ha) any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the CURRENT SITUATION (CS) 765 620 340 200 1,000 750 1,250 1,000 3,250 2,500 595 350 legal status of any territory, or any endorsement or IDENTIFIED PROJECTS (IP) 1,215 920 12,753 7,208 6,000 5,750 1,875 1,500 8,250 7,500 11,314 6,650 acceptance of such boundaries. UPPER LIMIT POTENTIAL (HLI) 19,215 15,920 30,466 17,208 18,500 15,750 14,375 11,500 20,750 17,500 28,328 16,650 NOVEMBER 2010 The Zambezi River Basin: Background and Context The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 1.2. Schematic of the Zambezi River with deregulated mean annual discharge (m3/s) and runoff (mm) Zambezi River Sub River Discharge Runoff Catchment mean annual river Sub River Discharge Runoff Catchment basin BV bank Tributary (m3/s) (mm) area (km2) flow (m3/s) basin BV bank Tributary (m3/s) (mm) area (km2) Kabompo 273 13 13-1 left/right Kabompo 273.0 109.4 78,683 Subtotal 273.0 109.4 78,683 Upper Zambezi 12 12-1 left/right Zambezi 742 256.2 91,317 1,015 Subtotal 742 256.2 91,317 Lungúe Bungo 11 11-1 left/right Lungúe Bungo 114 80.8 44,368 1,129 Subtotal 114 80.8 44,368 Luanginga 10 10-1 left/right Luanginga 69.4 61.0 35,893 1,198 Subtotal 69.4 61.0 35,893 Kwando/Chobe 8 8-1 left Kwando 32.5 9.0 113,393 8-2 left/right Chobe ­32.5 ­28.8 35,601 1,198 Subtotal 0.0 0.0 148,994 Barotse 9 9-1 left/right Zambezi ­17.6 ­4.8 115,753 1,180 Subtotal ­17.6 ­4.8 115,753 Kariba 6 6-1 right Gwayi 84 30.1 87,960 1,386 Kafue 6-2 right Sanyati 104 44.0 74,534 7 7-1 left/right Itezhi Tezhi 336 98.1 108,134 6-3 left/right Lake Kariba 18 55.6 10,033 1,758 7-2 left/right Kafue Flats 35.0 23.4 47,194 Subtotal 206 37.6 172,527 7-3 left/right Kafue D/S 0.7 47.6 477 Subtotal 372 75.3 155,805 Mupata 4 4-1 left/right Chongwe 4.1 71.6 1,813 1,812 4-2 left/right Zambezi 49.9 72.6 21,670 Subtotal 54.0 72.5 23,483 Luangwa 2,330 5 5-1 left/right Luangwa 518 102.3 159,615 Subtotal 518 102.3 159,615 Tete 2 2-1 right Manyame 26.5 20.6 40,497 2-2 right Luenya 180 99.4 57,004 Shire River and Lake Malawi/Niassa/Nyasa 2-3 left/right Zambezi 987 301.1 103,393 3,523 3 3-1 right Rumakali 12.5 954.4 414 Subtotal 1,193 187.3 200,894 3-2 left Songwe 35.2 273.4 4,060 3-3 left S. Rukuru+ 47.0 118.7 12,483 N. Rumphi 4,021 3-4 left/right Tributaries 528 207.5 80,259 3-5 left/right Lake Malawi/ ­287 ­314.4 28,760 Niassa/Nyasa evaporation 3-6 left/right Lake Malawi/ 336 84.1 125,976 Niassa/Nyasa Zambezi Delta outlet 1 1-1 left/right Zambezi 113 191.3 18,680 4,134 3-7 left/right Shire 162 220.4 23,183 Subtotal 113 191.3 18,680 Subtotal 498 105.3 149,159 INDIAN OCEAN Note: Excludes the operational influence at the Kariba, Cahora Bassa, and Itezhi Tezhi dams. 6 The Zambezi River Basin: Background and Context 1.4 populaTionand The eight riparian countries of the Basin repre- sent a wide range of economic conditions. Annual econoMy gross domestic product per capita ranges from $122 The population of the ZRB is approximately 30 in Zimbabwe to more than $7,000 in Botswana. million (table 1.2), more than 85 percent of whom Angola, Botswana, and Namibia have healthy cur- live in Malawi, Zimbabwe, and Zambia within four rent account surpluses, chiefly due to their oil and subbasins: Kafue, Kariba, Tete, and the Shire River diamond resources (table 1.3). and Lake Malawi/Niassa/Nyasa. Of the total population, approximately 7.6 mil- lion (25 percent) live in 21 main urban centers (with 1.5 approachand 50,000 or more inhabitants). The rest live in rural MeThodology areas. The proportion of rural population varies from country to country, from over 50 percent in Water resources development is not an end in itself. Zambia to around 85 percent in Malawi. Rather, it is a means to an end: the sustainable use The ZRB is rich in natural resources. The main of water for productive purposes to enhance growth economic activities are fisheries, mining, agriculture, and reduce poverty. The analysis reported here was tourism, and manufacturing. Industries depend on undertaken from an economic perspective so as to the electricity produced in the hydropower plants better integrate the implications of the development (HPPs) of the Basin, as well as on other sources of of investment in water management infrastructure energy (primarily coal and oil). into the broad economic development and growth Table 1.2. Population of the Zambezi River Basin (in thousands, 2005­06 data) Subbasin Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Total % Kabompo (13) 4 -- -- -- -- -- 279 -- 283 0.9 Upper Zambezi (12) 200 -- -- -- -- -- 71 -- 271 0.9 Lungúe Bungo (11) 99 -- -- -- -- -- 43 -- 142 0.5 Luanginga (10) 66 -- -- -- -- -- 56 -- 122 0.4 Barotse (9) 7 -- -- -- 66 -- 679 -- 752 2.5 Cuando/Chobe (8) 156 16 -- -- 46 -- 70 -- 288 1 Kafue (7) -- -- -- -- -- -- 3,852 -- 3,852 12.9 Kariba (6) -- -- -- -- -- -- 406 4,481 4,887 16.3 Luangwa (5) -- -- 40 12 -- -- 1,765 -- 1,817 6.1 Mupata (4) -- -- -- -- -- -- 113 111 224 0.7 Shire River - Lake Malawi/Niassa/ -- -- 10,059 614 -- 1,240 13 -- 11,926 39.8 Nyasa (3) Tete (2) -- -- 182 1,641 -- -- 221 3,011 5,055 16.9 Zambezi Delta (1) -- -- -- 349 -- -- -- -- 349 1.2 Total 532 17 10,281 2,616 112 1,240 7,568 7,603 29,969 -- % 1.8 0.1 34.3 8.7 0.4 4.1 25.3 25.4 -- 100 Source: Euroconsult Mott MacDonald 2007; SEDAC 2008. 7 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis the focus of this analysis is on major water-related Table 1.3. Macroeconomic data by country (2006) investments being considered by the riparian Population GDP GDP/cap Inflation countries in their national development plans. Country (million) (US$ million) (US$) rate (%) Development scenarios for other stakeholders can Angola 15.8 45.2 2,847 12.2 be superimposed on this analysis at a later time. Botswana 1.6 11.1 7,019 7.1 For the time being, however, water supply and sanitation, as well as environmental imperatives, Malawi 13.1 3.2 241 8.1 are considered as givens in nearly all scenarios con- Mozambique 20.0 6.8 338 7.9 sidered. In other words, hydropower and irrigation Namibia 2.0 6.9 3,389 6.7 development are superimposed over the continued Tanzania 38.2 14.2 372 7.0 provision of water for basic human needs and envi- Zambia 11.9 10.9 917 10.7 ronmental sustainability. This approach differs from Zimbabwe 11.7 1.4 122 >10,000 the conventional one of assuming basic water needs Source: Euroconsult Mott MacDonald 2007; SEDAC 2008. and environmental sustainability as constraints on the optimized use of water. It should be noted that the scenarios for full basin-wide hydropower potential and full irriga- objectives of the riparian countries and the Basin as a tion development are primarily of analytical inter- whole. An international river system such as the ZRB est, rather than for practical application. They are is extremely complex. That complexity is reflected used here to help bracket the range and scope of in, but also compounded by, the large number of the analysis and to provide reference points. The initiatives being undertaken within the Basin and scenarios are based on identified projects in national by the large volume of data and information that and regional plans, and are dependent on enabling already exists. To analyze such a complex system, political and economic preconditions for their full simplifications and assumptions are unavoidable. implementation. The full potential for hydropower Those assumptions and their potential implications and irrigation in the Basin is not expected to be are acknowledged throughout the report. achieved in the time horizon of this analysis, which is based on the current national economic plans of 1.5.1 analyticalframework the riparian countries. The scenario analysis is carried out for the Operating within the framework of integrated water primary objective of determining and maximizing resources management, this analysis considers the economic benefits while meeting water supply and following water users as stakeholders: irrigated environmental sustainability requirements. Full co- agriculture, hydropower, municipal development, operation among the riparian countries is assumed. rural development, navigation, tourism and wildlife The scenarios are tested using a coupled hydro- conservation, and the environment. The analytical economic modeling system described in volume framework considered here is illustrated graphically 4. The purpose of the modeling effort is to provide in figure 1.3. The present context of the natural and insight into the range of gains that may be expected developed resource base, as well as cross-cutting from various infrastructure investments along the factors, of the ZRB (rows in the matrix) is assessed axes of full hydropower and irrigation development against the water-using stakeholders (columns (while continuing to satisfy requirements for water in the matrix) for a set of development scenarios. supply and environmental sustainability). Those development scenarios are focused on two Additionally, the analysis examines the effects key water-using stakeholders that require major of conjunctive or coordinated operation of existing investments in the region: hydropower and irrigated facilities, as well as potential gains from the strate- agriculture. gic development of new facilities. The analysis also While the need to consider the details of the in- addresses the potential impact of the development teraction among all stakeholders is acknowledged, scenarios on the environment (wetlands), tourism, 8 The Zambezi River Basin: Background and Context Figure 1.3. Zambezi River Basin: scenario analysis matrix Regional Assessment Analytical framework applied to the development and analysis of scenarios. The regional assessment explores the eight riparian countries, 13 subbasins and three zones of the Basin to de ne scenarios based on optimized and collaborative water resource management Zambezi River Basin Management and Development Biophysical setting Zambezi River Basin cross-cutting factors Agriculture, Livestock and Forestry Macroeconomic setting Potable Water and Sanitation Environmental Sustainability Fisheries and Aquaculture Energy and Hydropower Mining and Industry Sociological setting Navigation Tourism Institutional setting Bene cial uses of water resources flood control, guaranteed minimum river flows in growth and on poverty reduction. With that in mind, the dry season, and other topics. the analysis considers the entire Basin as a single Specific attention is also given to the opera- natural resource base while examining potential tional and investment options for reducing flood sectoral investments. This approach is appropriate risks downstream of Cahora Bassa Dam and to the for initial indicative purposes and provides a com- possibility of partial restoration of natural floods to mon point of reference for all riparian countries. manage the impact on the Zambezi Delta of exist- The complexities inherent in national economics ing dams on the Zambezi River. In this analysis, the and transboundary political relationships are not impact of climate change on the hydrology of the directly addressed in this analysis. This is left to ZRB and on the investment options assessed are the riparian countries to address, informed by the addressed through a rudimentary incremental varia- results of this and other analyses. tion of key driving factors. Climate change is deemed a risk factor to developments and more detailed 1.5.2 Theriver/reservoirsystemModel analysis is warranted for an in-depth understand- ing of impact. The ongoing efforts by the riparian The modeling package adopted for the analysis is countries and the development partners on assessing HEC-3, a river and reservoir system model devel- the impact of climate change on the Zambezi River oped by the Hydrologic Engineering Center of the Basin will provide guidance in due course. U.S. Army Corps of Engineers. The version of the Looming large in the analysis are the economics model used in this study, illustrated in figure 1.4, of different options, conceived in terms of the effect was modified by the consultants to improve some of potential investments on national and regional of its features. The same software package was 9 Figure 1.4. Schematic of the river/reservoir system model for the Zambezi River Basin LEGEND Kabompo River Kafue Flats Flood plain Control point for irrigation abstraction Lake / reservoir / pondage Rumakali Control point for water supply abstraction 43 I.03.12 Rumakali 20 Hydropower plant (Tanzania) 34 35 35 Control point for mining & industrial abstraction 34 Existing control point Humage 34 Future control point Name of the abstraction line in the abstraction database I.03.05 25 I.07.01 Stream ow gauging station, (Tanzania) Songwe I Songwe II Songwe III I.07.02 Songwe Lake Malawi/Niassa/Nyasa Final number to distinguish di erent abstraction lines 15 reservoir in ow,hydropower I.03.06 Net In ow plant turbine ow + spill (Malawi) 36 37 37 38 38 39 39 21 Subbasin Mwandenga I.03.10 I: irrigation, W: drinkable water, M: mining & industry 26 Net evaporation series over reservoir Lake located at control point 26 Other rivers of Lake Malawi/Niassa/ I.03.08 (Tanzania) (Tanzania) 22 I.03.09 (Malawi) 40 Malawi/ 43 I.03.11 Zambezi Nyasa catchment Land discharge (Malawi) The following water abstraction points will be modeled with reservoirs in order to anticipate the regulation needs: 1.13, 1.12, 1.11, 1.10, Lower Fufu Niassa/Nyasa 1.08.1, 1.05.1, 1.05.2, 1.07.1, 1.06.7, 1.06.8, 1.02.2, 1.02.3. South Rukuru I.03.07 43 Future control points for irrigation are to a degree already used at present. 23 41 42 42 2 I.12.01 Phwezi 26 Naturalised discharges of Lake Chavuma Malawi/Niassa/Nyasa at Liwonde Mission North Rumphi 02 24 44 Kholombizo Lungúe Bungo Kabompo 3 01 1 Chiweta 45 I.03.04 I.11.01 Watopa Pontoon I.13.01 19 20 Nkula Falls M.07.01 46 Copperbelt mines, water W.07.01 46 I.07.01 16 abstractions Lusaka I.03.03 Zambezi & dewatering water 47 Luanginga supply The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Luangwa 4 03 I.07.03 17 48 Tedzani I.10.01 Kalabo 19 20 10 I.05.01 26 I.05.02 48 I.07.02 I.07.04 Kafue Gorge Upper 19 Lunsemfwa 49 I.03.02 Kafue 17 Shire Barotse 10 11 Kafue 20 25 Itezhi 17 18 20 21 Kapichira Flood Plain Tezhi Flats 50 Itezhi Tezhi Kafue Flats Luangwa Valley in ows 15 Kafue Gorge 22 in ows 50 Lower 22 I.05.03 5 I.09.01 M.06.01 (Zambia) 27 Chikwawa I.06.11 Cuando I.07.05 I.05.04 M.02.01 (Zambia) Maamba Colliery & 23 27 Moatize I.03.01 11 I.06.12 thermal station (Mozambique) 51 6 I.08.01 04 I.06.01 (Zambia) I.06.07 12 M.02.02 (Zimbabwe) Great 13 Benga Coal Licuari I.06.02 (Zimbabwe) (Zambia) 31 Kafue Katima Mulilo 15 East 29 Elephant 28 05 I.06.03 (Namibia) I.06.08 mines & thermal 15 Road Great East power stations Marsh Nacuadala Campo (Zimbabwe) Victoria Falls I.06.04 (Botswana) Mphanda Nkuwa bridge Road bridge Chongwe Kongola Chobe-Caprivi- I.02.03 Batoka Gorge I.01.01 Luangwa Lake Liambezi 7 15 29 Cuando / Chobe Flood Plain 11 09 15 16 31 17 Zambezi Zambezi 8 06 9 9 10 11 12 Kariba 15 24 Cahora Bassa 29 30 31 33 19 52 53 Delta Victoria Lower I.04.01 Cahora Bassa Tete - Selinda I.08.02 W.06.01 I.06.05 Catchment Cahora Bassa I.02.04 Lupata Falls (Zambia) reconstituted out ows Matundo I.01.02 Spillway (Zambia) Gaborone (Zambia) reconstituted Cais I.08.03 water supply I.04.02 local in ows 18 I.06.06 in ows 08 (Zimbabwe) Mutoko I.02.05 (Namibia) (Zimbabwe) 07 Road Brdge 32 (Zimbabwe) Okavango Copper Queen M.06.02 28 29 Swamps - Kamativi I.02.02 I.02.06 Okavango Gokwé I.02.01 (Mozambique) Okavango I.06.10 14 15 15 thermal Delta Pandamatenga Plains I.06.09 13 power Luenya Shawanoya W.06.02 Mazowe Manyane station Bulawayo water supply Gwayi 14 Sanyati Chivero The Zambezi River Basin: Background and Context adopted during the SADC 3.0.4 project that inves- Zambezi River downstream from the Kariba and Ca- tigated joint operation of the Kariba, Kafue Gorge hora Bassa dams, like the Zambezi Delta, has been per- Upper, and Cahora Bassa dams. The model is still manently altered by river-regulation infrastructure. being used by the Zambezi River Authority (ZRA). To take into account e-flows in the various The fact that water professionals in the ZRB were reaches of the Zambezi River, some assumptions familiar with the earlier version of the model partly had to be made related to the amount of water accounts for its selection. A detailed description of available at all times. The following e-flow criteria the model appears in volume 4 of this report. were used in the river/reservoir system model in In the present analysis, the modeling time step almost all the scenarios: the flow should never fall adopted is one month. All inputs, inflows, evapo- below historical low-flow levels in dry years of the ration, diversions or withdrawals, downstream record,1 where records are available. Moreover, the flow demands, and reservoir rule curves are on a average annual flow cannot fall below 60 percent monthly basis. The outputs of the model--reservoir of the natural average annual flow downstream storage and outflows, turbine flow, spill, and power from Kariba Dam. The minimum flow in the generation--are also on a monthly basis. The simu- Zambezi Delta in February was set at 7,000 m3/s lation period spans 40 years--from October 1962 to for at least four out of five dry years. September 2002--long enough to obtain a realistic The development scenarios, the state of the estimate of energy production. The main inflow basin, and the modeling, analysis, and input data series, from the Zambezi River at Victoria Falls, are described in detail in volumes 2, 3, and 4, re- shows that the flow sequence from 1962 to 1981 spectively. Together, they strengthen the analytical is above normal, while the sequence from 1982 to knowledge base available for making informed 2002 is below normal. The flow data available to the decisions about investment opportunities, financ- study team were insufficient to consider extending ing, and benefit sharing. Moreover, the analysis can the simulation period beyond 2002. Information on assist the Zambezi River Watercourse Commission groundwater (e.g., status of aquifers and abstraction awaiting ratification (ZAMCOM), SADC, and ripar- levels) was too insufficient to allow for sufficient ian countries by providing insight into options for conjunctive analysis. joint or cooperative development as well as associ- While the focus of this analysis is on hydro- ated benefit sharing. power and irrigation, the river/reservoir system model takes into account all sectors concerned 1.5.3 TheeconomicassessmentTool with water management, notably tourism, fisheries, environment such as environmental flows (e-flows) The economic assessment approach used here in- and specific important wetlands, flood control, and corporates the inputs from the various projects for industry. Details of the guidelines and rule curves sector analysis to provide an overall analysis of the used in the model for reservoir operations, flood economic implications of development and invest- management, delta and wetlands management, ment scenarios. A schematic of the elements of the environmental flows, tourism flows, and fisheries development scenario is given in figure 1.5. The flows are given in volume 4 of this series. development scenarios were compared to assess the Maintaining e-flows throughout the system was relative viability of a given option. For hydropower a major consideration in this analysis. Reaches of the and irrigation, the basic elements of the analysis are Zambezi River upstream of the Kariba and Cahora the projects identified by the riparian countries. This Bassa dams are generally considered in near-pristine analysis is multi-sectoral by design; the major link condition. The tributaries rising in Zimbabwe are among the sectors (and associated projects) is the highly developed, with river-regulation infrastructure allocation or use of water. for irrigation. The Kafue River is also regulated and The economic analysis uses input from the sustains a large number of water-using sectors. The river/reservoir system model. 1 The statistical dry year considered here is the natural flow with a five-year return period. 11 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 1.5. Schematic of the elements of the economic analysis tool Scenario Power sector Agriculture sector Other sectors Other major projects Hydropower plants Irrigation schemes ­ Tourism ­ Chobe/Zambezi transfer ­ Fisheries ­ Maamba coal mine ­ Environment ­ Gokwé coal mine ­ Moatize Benga coal mine ­ Lusaka water supply · Hydropower. The model uses the production · Scenario level ­ starting date, time horizon; figures from the hydropower installations · Sector ­ sector-specific parameters and prices, (described in detail in the section on the hydro- the specific irrigation models used in sector power in volume 3) and attributes these to the projects (e.g., crop budgets); and various hydropower projects. · Project ­ project time frames, project-specific · Irrigation. Based on the allocated water and costs and benefits. development scenarios, the appropriate models for the relevant irrigation projects are used at Details of the economic analysis assumptions specific abstraction points in the river/reservoir can be found in volume 4. system model, and the associated costs and The economic assessment tool provides, as benefits are calculated. output, a summary table, which includes: · Other sectors. Data on flows at Victoria Falls is used to assess their impact on tourism. Financial · Hydropower generation and agriculture output, and economic values of different flood manage- presented in the agricultural and irrigation ment options and their impact on the Zambezi calculations; Delta are calculated. The value of wetlands used · Cash flows based on project cash flows; in the analysis tool is derived from the analysis · Economic internal rate of return and net present of the environmental resources (details are pro- value (NPV) by development scenario, based on vided in volume 3). the appropriate time frame and project imple- · Other major projects. Water-transfer schemes as- mentation schedule; sociated with these major projects are included · Employment impact (jobs) calculated as the ra- in the scenario analysis. tio of jobs to gigawatt hours of installed capac- ity or jobs to hectares of a particular crop; and, The economic assessment is based on a number · A sensitivity analysis that was carried out for of assumptions regarding its parameters. It includes variations in investment costs, prices, and pro- the following: duction values. 12 2 The Development Scenarios In the Zambezi River Basin, there is vast potential for development and cooperation in hydropower and irrigation. In order to evaluate the associated benefits and costs of this potential, this study produced a set of `scenarios'. Using the analytical methodology described in section 1.5, these scenarios correspond to a set of different options. This chapter de- scribes each scenario in terms of: objective, features and findings. The types of variables being considered across the scenarios essentially include: · Production of firm and average energy (GWh per year); · Total average of annually irrigated area and the equipped irrigated area (hectares); · Net present value (US$ million); and · Employment effect (number of jobs, person years). The first scenario is called the `Base Case ­ current situation' (Scenario 0), and reflects the present status of hydropower production and irrigation across the Basin. The subsequent scenarios represent a range of different levels developments in new hydropower projects and irrigation developments, as well as the impact of coordinated operation in each of these two sectors. As the set of scenarios was developed, some had to be divided into sub-scenarios to adequately capture different variables within, such as other water-using demands (e.g., partial restoration of natural floods). Certain scenarios also specifically addressed flood protection in the Lower Zambezi and in the Zambezi River Delta. When more water using activities are considered, in addition to hydropower and irrigation developments, a more balanced multi-sector approach is indicated in Scenario 8. Building on Scenario 0, a total 28 scenarios (including sub- scenarios) were created and evaluated. A summary of the scenarios is reproduced in table 2.1. As the table indicates, provision for water supply for domestic use is included in all scenarios. Furthermore, minimum releases for environmental flows (e-flows) based on avail- able data is included in Scenario 3 onwards. These two water users are given highest priority and demand is considered fully satisfied. 13 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.1. Development scenarios Flood protection Water supply needs Other projects in Tete Restoration of natural flooding Hydropower Irrigation in the lower Delta E-flows Scenario CSNC CSCO SAPP CS IP IPC HLI HLIC NAF AF1 AF2 AF3 AF4 AF5 AF6 FP CC 0 Base case: current situation 1 Coordinated operation of key existing HPP facilities 2 Development SAPP A hydropower (up to 2025) 2A 2 + e-flows A 2B 2A with hydropower B coordination (4 clusters) 2C 2A with hydropower C coordination (2 clusters) 2D 2A with full hydropower D coordination 3 Base case for hydropower + identified projects + e-flows 4 Base case for hydropower + high-level irrigation + e-flows 5 2A + Identified irrigation A projects 5A 2A + Identified irrigation A projects (with cooperation) 6 2A + high-level irrigation A 6A 2A + high-level irrigation A (with cooperation) 7 5 + Other projects A 8 7 + Flood protection A 9 8 + impacts of climate change A 10-A Assess effects of restoring A natural floodings with 4,500 m3/s in the Delta in February 10-B Assess effects of restoring A natural floodings with 7,000 m3/s in the Delta in February 10-C Assess effects of restoring A natural floodings with 10,000 m3/s in the Delta in February 10-D Assess effects of restoring A natural floodings with 4,500 m3/s in the Delta in December 10-E Assess effects of restoring A natural floodings with 7,000 m3/s in the Delta in December 10-F Assess effects of restoring A natural floodings with 10,000 m3/s in the Delta in December 14 The Development Scenarios Table 2.1. Development scenarios (continued) Flood protection Water supply needs Other projects in Tete Restoration of natural flooding Hydropower Irrigation in the lower Delta E-flows Scenario CSNC CSCO SAPP CS IP IPC HLI HLIC NAF AF1 AF2 AF3 AF4 AF5 AF6 FP CC 11-A Assess effects of flood A protection (maximum of 10,000 m3/s) 11-B 10-A + Flood protection A 11-C 10-B + Flood protection A 11-D 10-C + Flood protection A 11-E 10-D + Flood protection A 11-F 10-E + Flood protection A 11-G 10-F + Flood protection A LEGEND Hydropower: OP: Other water withdrawal projects CSNC: Current situation without coordinated operation CSCO: Current situation with coordinated operation (Kafue, Kariba, Cahora Bassa) E-Flows: Environmental flows in all basin SAPP: Development SAPP hydropower CC: Climate change A : All hydro independently operated B : 4 clusters: Kariba/Kafue/Mozambique/Malawi Restoration of natural floodings: C : 2 clusters: Kariba + Kafue/Mozambique + Malawi NAF: No Artificial Flooding D : All clusters coordinated AF1: 4,500 m3/s in lower Delta in February (4 weeks) AF2: 7,000 m3/s in lower Delta in February (4 weeks) Irrigation: AF3: 10,000 m3/s in lower Delta in February (4 weeks) CS: Current situation AF4: 4,500 m3/s in lower Delta in December (4 weeks) IP: Identified projects AF5: 7,000 m3/s in lower Delta in December (4 weeks) IPC: Identified projects (with cooperation) AF6: 10,000 m3/s in lower Delta in December (4 weeks) HLI High-level irrigation HLIC High-level irrigation (with cooperation) Flood protection: FP: Maximum of 10,000 m3/s D/S Lupata 2.1 scenario0:basecase­ ed in the HEC-3 model. These are the Mulungushi, the Lunsemfwa, and the Lusiwasi (all located in the currenTsiTuaTion headwaters of the Luangwa subbasin), as well as the Objective: To assess the present energy generated Wovwe mini hydropower plant (HPP) in Malawi and by existing hydropower facilities (operated on the Victoria Falls HPP. These two latter facilities would stand-alone basis) and the present size of the ir- not be impacted by upstream water-intensive devel- rigated area across the Basin. opments when they operate during the wet season. Scenario 0 incorporates abstraction for domestic Features: Scenario 0 is based on existing hydro- water supply (included in all scenarios), but does power facilities across the Zambezi River Basin, not include releases for e-flows. operated on a stand-alone basis, and estimates the total equipped area for irrigation and the average Findings: In total, an estimated 22,776 GWh per year annually total irrigated area. of firm energy2 and 30,287 GWh per year of average Because of insufficient data and comparatively energy is generated by existing major hydropower minimal abstractions, some facilities were not includ- facilities in the ZRB. 2 In the model, firm energy is assumed at the 99% point on the duration curve. Unless inflows to all power plants are in per- fect phase, the timing of firm energy at any hydropower plant does not necessarily coincide with the timing at other power plants. Hence, firm energy is non-additive. System firm energy does not necessarily equal the sum of each individual plant. 15 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis The equipped area for irrigation in the ZRB is energy is similar to the current situation in Scenario estimated at 183,000 hectares. The average total ir- 0, the benefits of coordinating existing HPPs has a net rigated area, however, is 259,000 hectares (i.e., the present value (NPV) of $585 million (table 2.2.). Aver- majority of the equipped area is farmed more than age energy production increases slightly in Scenario once per year). 1 with an additional 36 GWh per year, but remains practically constant at just over 30,000 GWh per year. The gain in energy produced through conjunc- 2.2 scenario1:coordinaTed tive operation and cooperation may satisfy potential operaTionoFexisTing deficits in the base load. This could save costs to hydropowerFaciliTies cover any delay in construction of new or upgraded hydropower plant. But the capacity of the hydro- Objective: To assess the potential of energy gen- power system remains unchanged.3 eration in the ZRB from conjunctive operation of The gains in energy production as predicted existing hydropower facilities. by the river/reservoir system model would be the maximum achievable under optimum condi- Features: Scenario 1 explores the effect of conjunc- tions. This model is based on historical monthly tive operation of existing HPP facilities. The scenario flows, which do not necessarily provide sufficient also incorporates abstraction for domestic water indication of future conditions. Other determining supply (included in all scenarios), but does not factors also suggest that a realistic gain in energy include releases for e-flows. production may be less than predicted by these op- timal conditions assumed under the model. These Findings: If existing hydropower facilities across factors include hydrological uncertainty, location of the Basin were operated as a `common power pool', individual HPPs on different tributaries in the ZRB, firm energy generation would increase from 22,776 and different operation and management of HPPs to 24,397 GWh per year. The additional 1,621 GWh in riparian countries. per year represents a 7.1 percent increase in produc- Achieving the potential gains predicted by the tion. With the assumption that distribution of firm river/reservoir system model would depend on a Table 2.2. Benefits of coordinated operation of existing HPPs Energy production (GWh/year) Change in Scenario 0 Scenario 1 energy (%) NPV Hydropower plant Firm Secondary Average Firm Average Firm (US$ m) Kariba North 3,184 650 3,834 3,849 78 Kariba South 3,184 650 3,834 3,849 78 Kafue Gorge Upper 4,695 2,090 6,785 7,359 224 Cahora Bassa 11,922 1,613 13,535 24,397 13,028 7 181 Nkula Falls 462 555 1,017 989 11 Tedzani 300 422 722 691 1 Kapichira 455 105 560 558 12 Total 22,776 7,511 30,287 24,397 30,323 7 585 Note: The valuation of energy production is based on separate pricing of firm energy and secondary energy. Average energy may either increase or decrease as a result of differing operation modes in the reservoir, possibly modifying reservoir evaporation and spill at downstream run-of-the-river (RoR) plants. The marginal average increase of 36 GWh/year is well within the accuracy of the results. 3 This would have to be confirmed within the framework of a generation-planning exercise. 16 The Development Scenarios fully interconnected transmission network. Such a network would moreover ensure both the efficiency Figure 2.1. Net present value by country (US$ m): and a more equitable sharing of gains. Although Scenario 1 compared with Scenario 0 the current lack of interconnected networks may 300 impede such developments, the income generated 250 by improved efficiency could sustain substantial 200 capital investments of approximately $100 million 150 per year over five years and still yield an internal US$ m 100 rate of return (IRR) of over 10 percent. The modified flow from joint operation of HPPs 50 could generate additional benefits in the Delta and, 0 to a lesser degree, benefits to other sectors (includ- ­50 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe ing fisheries, the environment, and tourism). The summary of NPV estimates of hydropower and other sectors in each riparian country is listed in Country table 2.3. The table shows that benefits are primar- Hydropower Other sectors ily concentrated in downstream countries. This indicates that mechanisms for benefit sharing could be implemented in parallel to the conjunctive opera- tions of existing HPPs. Pool Regional Generation and Transmission Expansion Study (SAPP). From Scenario 2A onwards, releases for e-flows are incorporated. In Scenario 2B, 2C and 2D, the 2.3 scenario2:developMenT effects of coordinated operation of the HPPs in clusters oFsapphydropowerplans are assessed. Scenarios 2, 2A, 2B, 2C and 2D explore what happens Objective: To assess potential energy generation when the system of hydropower plants across the Basin from developing hydropower plants as envisaged is expanded with upgrades, extensions and new con- under the Southern Africa Power Pool (SAPP) Ex- structions of HPPs listed in the Southern Africa Power pansion Study. Features: Scenario 2 includes existing HPPs (Scenar- io 0) and adds HPPs identified in the SAPP Regional Table 2.3. Net present value by country (US$ m): Generation and Transmission Expansion Plan Study Scenario 1 compared with Scenario 0 up to 2025 (least cost alternatives). In the model, the upgraded HPPs are not operated in conjunction in Country Hydropower Other sectors Total (US$ m) Scenario 2. Table 2.4 lists the HPPs considered. Angola 0.00 0.00 0.00 The model optimizes stand-alone firm energy Botswana 0.00 0.00 0.00 for the HPPs served by a carry-over reservoir--that Malawi 25.00 ­0.66 24.34 is, the Kariba, Cahora Bassa, Kafue Gorge, Ru- makali, and the three Songwe reservoirs. Scenario 2 Mozambique 181.00 24.00 205.00 incorporates abstraction and allocation for domestic Namibia 0.00 0.00 0.00 water supply (included in all scenarios), but does Tanzania 0.00 0.00 0.00 not include releases for e-flows. Zambia 301.00 ­0.14 300.86 In the SAPP, there are plans to extend many of the HPPs in the future (e.g., Kariba North and South, Zimbabwe 78.00 ­0.14 77.86 Cahora Bassa North, and Kapichira II). Some will be Total 585.00 23.24 609.00 upgraded to provide extra energy (e.g., Kapichira II), Note: NPVs are based on separate pricing of firm and secondary energy and others will provide more operational capability 17 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis such as peaking power (e.g., Kariba North and South Findings: Compared with the current situation in and Cahora Bassa North). The amount of supplemen- Scenario 0, firm energy production increases by 71 tary generation is estimated to be nine percent for percent from 22,776 to 39,000 GWh per year when Kariba, 11 percent for Cahora Bassa, and 90 percent the future system of HPPs under SAPP is developed. for Kapichira HPPs. Total average energy production doubles from The HPP system, as such, generates substantial 30,287 to 60,760 GWh per year. additional benefits in terms of firm energy that can- The NPV of additional energy production is not directly be attributed to individual HPPs. In this approximately one billion dollars.4 The estimated calculation, the firm energy produced by the system employment effect is around 3,050 additional jobs5 of HPPs is distributed according to individual HPPs. (or 92,000 person years).6 Table 2.4. SAPP HPPs development: Scenario 2 compared with Scenario 0 Energy production (GWh/year) % Change in energy Scenario 0 Scenario 2 production NPV IRR Hydropower plant Firm Average Firm Average Firm Average (US$ m) (%) Batoka Gorge North projected 0 0 954 4,819 0 0 ­285 4 Batoka Gorge South projected 0 0 954 4,819 0 0 ­285 4 Kariba North extension 3,184 3,834 3,167 4,179 ­1 9 563 0 Kariba South extension 3,184 3,834 3,167 4,179 ­1 9 563 0 Itezhi Tezhi extension 0 0 284 716 0 0 ­19 8 Kafue Gorge Upper refurbishment 4,695 6,785 4,687 6,784 0 0 733 0 Kafue Gorge Lower projected 0 0 2,368 4,097 0 0 ­545 4 Cahora Bassa existing n.a. 0 11,922 13,535 11,826 15,024 ­1 11 Cahora Bassa North Bank extension 562 20 Mphanda Nkuwa projected 0 0 6,190 9,092 0 0 ­272 8 Rumakali projected 0 0 686 985 0 0 ­147 2 Songwe I ­ Malawi projected 0 0 21 45 0 0 Songwe II ­ Malawi projected 0 0 138 245 0 0 ­48 2 Songwe III ­ Malawi projected 0 0 114 207 0 0 Songwe I ­ Tanzania projected 0 0 21 45 0 0 Songwe II ­ Tanzania projected 0 0 138 245 0 0 ­37 4 Songwe III ­ Tanzania projected 0 0 114 207 0 0 Lower Fufu projected 0 0 134 645 0 0 ­9 8 Kholombizo projected 0 0 344 1,626 0 0 ­32 7 Nkula Falls existing 462 1,017 460 1,017 0 0 112 0 Tedzani existing 300 721 299 721 0 0 47 0 Kapichira I existing 85 0 542 560 541 1,063 0 90 Kapichira II extension 18 15 Total 22,776 30,286 39,000 60,760 71 101 1,003 13 Note: NPV is based on separate pricing of firm energy and secondary energy. This applies to all subsequent tables that list NPV. 4 Please note that the benefits are calculated with separate pricing of firm and secondary energy. 5 Estimated employment impact is based on the size of the HPP. 6 This is the undiscounted sum of the calculated employment effect for the whole time horizon. It reflects the number 18 The Development Scenarios The way firm energy will be distributed in real- ity will depend on the stacking of energy produc- Figure 2.2. Net present value by country (US$ m): tion. A more accurate estimation would therefore Scenario 2 compared with Scenario 0 involve generation planning for the system. Should 500 this lead to a shift in firm energy production from 400 one plant to another, there will also be a significant change in the viability of the power generated. 300 The outcome of the economic analysis is extremely 200 sensitive to the value assigned to the firm energy US$ m 100 (see table 2.5.). If it drops below $0.05/kilowatt hour 0 (KWh), the investment yields a negative NPV. The HPP development envisaged in SAPP 100 would more than triple the capacity of the existing 200 system (Scenario 0), from approximately the cur- 300 rent estimated capacity of 4,975 MW to a total of Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe approximately 15,300 megawatt (MW).7 Country Hydropower Other sectors Table 2.5. Sensitivity to firm energy value US$/KWh NPV IRR of firm energy (US$ million) (%) 2.4 scenario2a:sappwiTh 0.02 ­2,545 n/a e-Flows 0.03 ­1,559 6 0.04 ­574 8 Objective: To assess the impact of e-flow releases on 0.05 412 11 the system of HPPs developed under SAPP, without 0.06 1,003 13 conjunctive operation. 0.06 1,398 15 Features: Scenario 2A is based on the upgrades, extensions and new construction of HPPs under Table 2.6. Net present value by country (US$ m): SAPP (i.e., Scenario 2) but also includes vital e-flow Scenario 2 compared with Scenario 0 releases (7,000 m3 per second in the lower Delta in February). The HPPs in Scenario 2A are indepen- Country Hydropower Other sectors Total dently operated. Abstraction for domestic water Angola 0.00 0.00 0.00 supply is included (all scenarios). Botswana 0.00 0.00 0.00 Malawi 171.50 0.25 905.00 Environmental flow requirements Mozambique 290.56 2.27 293.00 Namibia 0.00 0.00 0.00 In order to take into account e-flow requirements with due consideration to the amount of water Tanzania ­183.93 0.00 ­184.00 available in the rivers, two flow regimes have Zambia 447.19 0.32 ­286.00 been assessed for the entire Zambezi River Basin. Zimbabwe 278.18 0.32 279.00 These are: Total 1,004.00 3.00 1,007.00 of workplaces multiplied by number of years. It could therefore represent 92,000 staff in one year, or 47,000 in two years, or so on. 7 The HEC-3 model used for the MSIOA included a selection of the future potential HPP. See volume 3 and 4 for more details. 19 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis · Flow should never drop below any given value representing the current low-flow levels in dry Table 2.7. Minimum flow levels in major years; and tributaries of the Zambezi River Basin · Average annual flow should not drop below Minimum flow level 60 percent of the natural average annual flow Control point (m3/s year round) (which is in fact equivalent to a minimum flood Barotse Flats 186 constraint because annual run-off is largely Zambezi River at Victoria Falls 145 produced during flooding events). Downstream of Lake Kariba 237 Lower Kafue 27 These two rules have been translated in the Lower Luangwa 11 river/reservoir system model as follows: Lower Shire 133 Zambezi Delta 7,000 (February) Table 2.8. SAPP HPPs development with E-flow rules: Scenario 2A compared with Scenario 2 (energy) and compared with Scenario 0 (NPV) Energy production (GWh/year) % Change in NPV Scenario 2 Scenario 2A energy production compared with Scenario 0 IRR Hydropower plant Firm Average Firm Average Firm Average (US$ m) (%) Batoka Gorge North projected 954 4,819 954 4,819 0 0 ­291 4 Batoka Gorge South projected 954 4,819 954 4,819 0 0 ­291 4 Kariba North extension 3,167 4,179 3,184 4,180 1 0 493 0 Kariba South extension 3,167 4,179 3,184 4,180 1 0 493 0 Itezhi Tezhi extension 284 716 284 716 0 0 ­22 8 Kafue Gorge Upper refurbishment 4,687 6,784 4,542 6,766 ­3 0 603 0 Kafue Gorge Lower projected 2,368 4,097 2,301 4,092 ­3 0 ­577 4 Cahora Bassa existing 0 0 11,826 15,024 9,680 14,204 ­18 ­5 Cahora Bassa North Bank extension 211 14 Mphanda Nkuwa projected 6,190 9,093 5,026 8,477 ­19 ­7 ­434 7 Rumakali projected 686 985 686 985 0 0 ­151 2 Songwe I ­ Malawi projected 21 45 21 45 0 0 Songwe II ­ Malawi projected 138 245 138 245 0 0 ­48 2 Songwe III ­ Malawi projected 114 207 114 207 0 0 Songwe I ­ Tanzania projected 21 45 21 45 0 0 Songwe II ­ Tanzania projected 138 245 138 245 0 0 ­39 4 Songwe III ­ Tanzania projected 114 207 114 207 0 0 Lower Fufu projected 134 645 134 645 0 0 ­10 8 Kholombizo projected 344 1,626 344 1,626 0 0 ­34 7 Nkula Falls existing 460 1,017 460 1,017 0 0 95 0 Tedzani existing 299 720 299 721 0 0 40 0 Kapichira I existing 72 0 541 1,063 541 1,063 0 0 Kapichira II extension 18 15 Total 39,000 60,760 35,302 59,304 ­9 ­2 129 10 20 The Development Scenarios · When the flow drops below the 10-year low flow ("monthQ10 low-flow discharge"), abstractions Figure 2.3. Net present value by country (US$ m): are reduced, upstream regulation is increased, or Scenario 2A compared with Scenario 0 dam management is modified in order to satisfy 250 the flow rule. It may happen, though, that the 10- 200 year low flow is not satisfied while there are no 150 more abstractions or dams upstream. If it is null 100 (on the Zimbabwean tributaries, for instance), then 50 the five-year low flow is selected ("monthQ5 low- US$ m 0 flow discharge"). If in turn this flow is also null (in ­50 rare instances), no minimum flow is considered. ­100 · For the flood level of the rivers not regulated by ­150 any large dam, the maximum regulation volume ­200 upstream at any given point cannot be higher ­250 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe than 40 percent of the mean annual run-off of the five year dry-year flow ("yearQ5 low-flow discharge"). Consequently, at least 60 percent Country of the flood should be preserved during four Hydropower Other sectors years out of five. · For the flood level downstream of Kariba Dam, minimum flows in the Delta should be 7,000 m3 per second at least four years out of five. This Findings: Incorporating releases for e-flows in rule also correspond to the rule implemented Scenario 2A reduces the firm energy generation by under the scenario AF2." nine percent to 35,302 GWh per year compared with Scenario 2. The total average energy production In terms of water abstractions, there is no promi- also falls, by two percent to 59,304 GWh per year nent difference between Scenario 2 and Scenario compared with Scenario 2. 2A. Therefore, there will be no significant difference In economic terms, the reduction in firm energy between low flows in relation to the yearQ5 low-flow generation (nine percent) is equivalent to approxi- discharge. But in drier years, Cahora Bassa Dam will mately $207 million per year. The reduction in average need to release the minimum flow needed down- energy is equivalent to approximately $69 million per stream and for the February flood of the lower Delta. year. In the absence of adequate economic assess- ment of the benefits derived from e-flows, the IRR of the investments drops by three percent compared Table 2.9. Net present value by country (US$ m): with Scenario 0 (from 13 to 10 percent). The increase Scenario 2A compared with Scenario 0 in secondary energy is 2,241 GWh, which would be equivalent to approximately $45 million. The employ- Country Hydropower Other sectors Total ment effect, however, is assumed to be the same as Angola 0.00 0.00 0.00 for Scenario 2, approximately 3,050 additional jobs. Botswana 0.00 0.00 0.00 Malawi 133.23 0.26 133.49 Mozambique ­223.80 64.77 ­159.03 2.5 scenario2b:sapp,e-Flows Namibia 0.00 0.00 0.00 andcoordinaTion(4clusTers) Tanzania ­190.23 0.00 ­190.23 Zambia 206.59 0.03 206.62 Objective: To assess the benefits of operating the Zimbabwe 202.59 0.03 202.62 system of HPPs under SAPP in four clusters (in- cluding e-flows). Total 129.00 65.09 193.47 21 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Features: Scenario 2B assumes the upgrades, exten- Gorge Upper, and Kafue Gorge Lower dams sions and new construction of HPPs under SAPP could regulate inflow into Lake Cahora Bassa; and e-flow releases (7,000 m3 per second in the and the Cahora Bassa Dam could regulate lower Delta in February). The expanded system of inflow into the future reservoir behind the HPPs are operated in conjunction in four clusters in Mphanda Nkuwa Dam. Scenario 2B. Abstraction for domestic water supply 4. Shire River and Lake Malawi/Nyasa/Niassa: En- is included. ergy generation in this cluster is assumed to The four clusters of conjunctive operation of be nearly identical to Scenario 2A (without HPPs are: coordination and e-flows) because the HPPs (existing and future) are either run-of-the-river 1. Upper Zambezi River: The Batoka Gorge (future) or have relatively small reservoirs. This is the and Kariba (existing) dams are operated in case of, for example, Songwe I, II, and III which conjunction. Given that the Batoka Gorge is pro- are principally operated for flood mitigation. posed to be a run-of-the-river (RoR) plant and that both plants are on the same stem of the river, Findings: Compared with Scenario 2A of indepen- this is a likely operational mode potentially con- dently operated HPPs, the conjunctive operation of sidered by the Zambezi River Authority (ZRA). HPPs (existing and future) in four clusters would 2. Kafue River: The Itezhi Tezhi reservoir is oper- increase firm energy production by 13 percent from ated to consolidate energy of the system gen- 35,302 to 39,928 GWh per year. Average energy erated by the Itezhi Tezhi Dam (existing dam production in Scenario 2B, 59,138 GWh per year, with plans for extension), and the HPPs Kafue remains practically unchanged compared with Gorge Upper (existing) and Kafue Gorge Lower Scenario 2A. (new project). Operating the system of HPPs in four clusters 3. Middle Zambezi River: The Cahora Bassa (exist- would increase the NPV with more than one billion ing) and Mphanda Nkuwa (new project) dams dollars compared with Scenario 2A (table 2.11.). are operated in conjunction (for similar reasons The benefits derived in Scenario 2B are primarily as for the upper Zambezi River cluster). Extra achieved through the conjunctive operation in the consolidation of energy is comparatively mar- first cluster, i.e. the Batoka Gorge and Kariba dams ginal because the Kariba, Itezhi Tezhi, Kafue (table 2.10.). These two hydropower plants would Table 2.10. SAPP HPP development, E-flow rules and Coordination (4 clusters): Scenario 2B compared with Scenario 2A Energy production (GWh/year) % Change in energy Change in Scenario 2A Scenario 2B production NPV Hydropower plant/ Cluster of operation Firm Average Firm Average Firm Average (US$ m) 1. Upper Zambezi River Batoka Gorge North projected 954 4,819 4,816 0 13 Batoka Gorge South projected 954 4,819 4,816 0 13 13,315 70 Kariba North extension 3,184 4,180 4,093 ­2 162 Kariba South extension 3,184 4,180 4,093 ­2 162 Subtotal 7,816 17,998 13,315 17,818 70 ­1 350 2. Kafue River Itezhi Tezhi extension 284 716 716 0 7 7,446 5 Kafue Gorge Upper refurbishment 4,542 6,766 6,779 0 231 Continued on next page 22 The Development Scenarios Table 2.10. SAPP HPP development, E-flow rules and Coordination (4 clusters): Scenario 2B compared with Scenario 2A (continued) Energy production (GWh/year) % Change in energy Change in Scenario 2A Scenario 2B production NPV Hydropower plant/ Cluster of operation Firm Average Firm Average Firm Average (US$ m) Kafue Gorge Lower projected 2,301 4,092 4,088 0 58 Subtotal 7,088 11,574 7,446 11,583 5 0 296 3. Middle Zambezi River Cahora Bassa existing 9,680 14,204 14,117 ­1 Cahora Bassa North Bank extension 15,006 2 241 Mphanda Nkuwa projected 5,026 8,477 8,575 1 100 Subtotal 14,685 22,681 15,006 22,692 2 0 341 4. Shire River and Lake Malawi/Niassa/Nyasa Rumakali projected 686 985 985 0 11 Songwe I ­ Malawi projected 21 45 45 0 Songwe II ­ Malawi projected 138 245 245 0 0 Songwe III ­ Malawi projected 114 207 204 ­1 Songwe I ­ Tanzania projected 21 45 45 0 Songwe II ­ Tanzania projected 138 245 245 0 4 Songwe III ­ Tanzania projected 114 207 3,092 204 0 ­1 Lower Fufu projected 134 645 645 0 2 Kholombizo projected 344 1,626 1,626 0 4 Nkula Falls existing 460 1,017 1,017 0 36 Tedzani existing 299 721 721 0 15 Kapichira I existing 28 541 1,063 1,063 0 Kapichira II extension ­35 Subtotal 3,091 7,051 3,092 7,045 0 0 65 Total 35,302 59,304 39,928 59,138 13 0 1,052 operate, not only in tandem, but also to compensate Table 2.11. Net present value by country (US$ m): each other. During the dry season, when the pro- Scenario 2B compared with Scenario 2A duction of Batoka Gorge Dam is down, most of the Country Hydropower Other sectors Total power is produced by the Kariba Dam. During the wet season, Batoka Gorge Dam carries the major Angola 0.00 0.00 0.00 portion of the load while the Kariba reservoir refills. Botswana 0.00 0.00 0.00 Creation of the cluster to facilitate this type of co- Malawi 51.27 ­0.06 51.22 operation would require no additional investments Mozambique 340.88 ­3.26 337.61 above those detailed under Scenario 2. Namibia 0.00 0.00 0.00 The employment effects are assumed to be the Tanzania 14.12 0.00 14.12 same as in Scenario 2, approximately 3,050 addi- Zambia 470.69 2.29 472.98 tional jobs. Conjunctive operation of HPPs in these Zimbabwe 174.60 2.29 176.89 four clusters would generate a small net increase in Total 1,052.00 1.00 1,053.00 productivity of the other sectors (table 2.11.). 23 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis and vital e-flow releases (7,000 m3 per second in Figure 2.4. Net present value by country (US$ m): the lower Delta in February). It considers further Scenario 2B compared with Scenario 2A integration through the conjunctive operation of HPPs in two clusters. Abstraction for domestic 500 water supply is included. 400 The two clusters of conjunctive operation of 300 HPPs are: US$ m 200 · Zambia and Zimbabwe: HPPs in this extensive 100 area is operated as one integrated aggregate 0 of the Upper Zambezi and the Kafue River ­100 subbasins, primarily located in Zambia and Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Zimbabwe. · Mozambique and Malawi: HPPs in this extensive Country area is operated as one integrated aggregate Hydropower Other sectors of the Lower Zambezi and the Shire River and Lake Malawi/Niassa/Nyasa subbasins. 2.6 scenario2c:sapp, Findings: Scenario 2C shows that conjunctive op- eration in two clusters will generate a seven percent e-FlowsandcoordinaTion increase to 37,712 GWh per year of firm energy (2clusTers) production compared with Scenario 2A. Compared with the 13 percent increase in firm energy gen- Objective: To assess the benefits of operating the eration when operating the HPPs in four clusters system of HPPs under SAPP in two clusters (includ- (Scenario 2B), this smaller increase is caused by re- ing e-flows). arrangement in the energy generation of individual HPPs. An analysis of model output shows that low Features: Scenario 2C assumes the upgrades, exten- and high ranges of energy production are concur- sions and new construction of HPPs under SAPP, rent in Scenario 2C (table 2.12). Average energy Table 2.12. SAPP HPP development, E-flow rules and Coordination (2 clusters): Scenario 2C compared with Scenario 2B Energy production (GWh/year) % change in energy Change Scenario 2B Scenario 2C production in NPV Hydropower plant/ Cluster of operation Firm Average Firm Average Firm Average (US$ m) 1. Zambia and Zimbabwe Batoka Gorge North projected 4,816 4,818 0 ­21 Batoka Gorge South projected 4,816 4,818 0 ­21 Kariba North extension 4,093 4,069 ­1 2 Kariba South extension 18,957 4,093 19,570 4,069 3 ­1 2 Itezhi Tezhi extension 716 715 0 ­13 Kafue Gorge Upper refurbishment 6,779 7,147 5 16 Kafue Gorge Lower projected 4,088 3,814 ­7 ­99 Subtotal 18,957 29,401 19,570 29,450 3 0 ­134 Continued on next page 24 The Development Scenarios Table 2.12. SAPP HPP development, E-flow rules and Coordination (2 clusters): Scenario 2C compared with Scenario 2B (continued) Energy production (GWh/year) % change in energy Change Scenario 2B Scenario 2C production in NPV Hydropower plant/ Cluster of operation Firm Average Firm Average Firm Average (US$ m) 2. Mozambique and Malawi Cahora Bassa existing 0 14,117 14,201 1 Cahora Bassa North Bank extension 100 Mphanda Nkuwa projected 8,575 8,640 1 ­172 Rumakali projected 985 951 ­3 ­18 Songwe I ­ Malawi projected 45 37 ­19 Songwe II ­ Malawi projected 245 262 7 0 Songwe III ­ Malawi projected 204 219 7 Songwe I ­ Tanzania projected 45 37 ­19 18,913 19,894 5 Songwe II ­ Tanzania projected 245 262 7 ­6 Songwe III ­ Tanzania projected 204 219 7 Lower Fufu projected 645 645 0 ­3 Kholombizo projected 1,626 1,602 ­1 ­7 Nkula Falls existing 1,017 992 ­2 1 Tedzani existing 721 693 ­4 Kapichira I existing 1 1,063 1,041 ­2 Kapichira II extension ­35 Subtotal 18,913 29,737 19,894 29,801 5 0 ­139 Total 39,928 59,138 37,712 59,251 ­6 0 ­273 production in Scenario 2C of 59,251 GWh per year and e-flow releases (7,000 m3 per second in the lower remains practically unchanged compared with Delta in February). The HPPs in the ZRB are oper- Scenario 2A. ated in conjunction as one fully integrated system. Conjunctive operation of HPPs in two clusters Abstraction for domestic water supply is included. requires no additional investments above those detailed under Scenario 2. The employment effects Findings: Conjunctive operation of the HPPs as one are assumed to be the same as in Scenario 2, ap- fully integrated system would increase firm energy proximately 3,050 additional jobs. production by 23 percent to a total of 43,476 GWh per year compared with Scenario 2A (independently operated system). Coordination and conjunctive op- 2.7 scenario2d:sapp,e-Flows eration would, in other terms, equate to 8,174 GWh andcoordinaTion(1sysTeM) per year (table 2.13). The average energy produced in Scenario 2D is practically unchanged compared Objective: To assess the benefits of operating the with Scenario 2A. SAPP HPP system as a fully integrated system of Creation of the cluster to facilitate cooperation conjunctive operation of HPPs (including e-flows). requires no additional investments above those detailed under Scenario 2. The employment effects Features: Scenario 2D assumes the upgrades, exten- are assumed to be the same as in Scenario 2, ap- sions and new construction of HPPs under SAPP proximately additional 3,050 jobs. 25 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.13. SAPP HPP development, E-flow rules and Full Coordination (1 cluster): Scenario 2D compared with Scenario 2C Energy production (GWh/year) % Change in energy Change Scenario 2C Scenario 2D production in NPV Hydropower plant Firm Average Firm Average Firm Average (US$ m) Batoka Gorge North projected 4,818 4,818 0 55 Batoka Gorge South projected 4,818 4,818 0 55 Kariba North extension 4,069 4,084 0 ­1 Kariba South extension 4,069 4,084 0 ­1 Itezhi Tezhi extension 715 716 0 31 Kafue Gorge Upper refurbishment 7,147 7,206 1 ­37 Kafue Gorge Lower projected 3,814 3,830 0 258 Cahora Bassa existing 0 14,201 14,004 15 Cahora Bassa North Bank extension ­254 Mphanda Nkuwa projected 8,640 8,658 0 450 Rumakali projected 951 952 0 48 Songwe I ­ Malawi projected 37,712 37 43,476 40 15 9 Songwe II ­ Malawi projected 262 262 0 0 Songwe III ­ Malawi projected 219 216 ­1 Songwe I ­ Tanzania projected 37 40 9 Songwe II ­ Tanzania projected 262 262 0 16 Songwe III ­ Tanzania projected 219 216 ­1 Lower Fufu projected 645 645 0 8 Kholombizo projected 1,602 1,603 0 18 Nkula Falls existing 992 991 0 ­1 Tedzani existing 693 693 0 0 Kapichira I existing ­1 1,041 1,040 15 Kapichira II extension ­35 Total 37,712 59,251 43,476 59,178 15 0 609 2.7.1 benefitsofcoordinatedoperationof Table 2.15. outlines the impact of introducing hpps e-flows and then gradually incorporating different options for coordinating HPPs. The successive gain Energy generation or loss in firm energy generation is also illustrated in figure 2.6. To put the additional firm energy gener- Implementing the SAPP involves the development ated from coordinated operation into context, this of a series of prioritized HPPs with a planning ho- increase of over 8,174 GWh per year in Scenario rizon of 2025. Scenarios 2, 2A to 2D were developed 2D (compared with 2A without coordination) is to identify the benefits that would accrue from the equivalent to two percent of the firm energy demand inclusion of e-flows, and the progressive integration increase forecasted in SAPP for the year 2025. This and coordinated management of the HPPs in the benefit represents an opportunity to offset energy ZRB within a regional SAPP power grid. deficits and a comparatively cost-effective way to 26 The Development Scenarios Table 2.14. Net present value by country (US$ m): Figure 2.5. Net present value by country (US$ m): Scenario 2D compared with Scenario 2C Scenario 2D compared with Scenario 2C Country Hydropower Other sectors Total 350 Angola 0.00 0.00 0.00 300 Botswana 0.00 0.00 0.00 250 200 Malawi ­11.00 0.13 ­48.00 US$ m 150 Mozambique 196.00 ­0.53 195.00 100 Namibia 0.00 0.00 0.00 50 Tanzania 64.00 0.00 64.00 0 Zambia 306.00 ­0.20 344.00 ­50 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Zimbabwe 54.00 ­0.27 54.00 Total 609.00 ­0.87 608.00 Country Hydropower Other sectors achieve growth in the energy production capacity of the ZRB. Average energy production, on the other hand, yields very high benefits. In figure 2.7., the NPV of was only marginally influenced by the introduction Scenarios 1­2D is presented. The results demon- of e-flow requirements in the lower Delta (Scenario strate that the optimization of firm energy produc- 2A ­ 59,304 GWh per year; Scenario 2B ­ 59,138 GWh tion has a significant influence on the viability of per year; Scenario 2C ­ 59,251; and Scenario 2D ­ the investments made. The NPV of Scenario 2D 59,178 GWh per year). This pattern was repeated at is substantially higher than that of Scenario 2 for the individual HPP level. example. The benefits from coordinated operation In terms of NPV, increased coordination of of the system of HPPs is also reflected in the IRR, HPPs (from Scenario 2A to 2D) would be equiva- where Scenario 2 yields an IRR of 13 percent and lent to $1.4 billion and the IRR increases from 10 Scenarios 2A and 2D yield 10 percent and 15 percent to 15 percent. There is a premium on firm energy respectively. With a discounting rate of 10 percent, production, and the expansion of that production an IRR of 10 percent yields an NPV equal to zero. Table 2.15. Summary of energy generated in Scenario 0­Scenario 2D Existing facilities SAPP HPPs development and investment Scenario Scenario Scenario 0 Scenario 1 Scenario 2 Scenario 2A 2B 2C Scenario 2D Coordinated Stand-alone Stand-alone 4 clusters 2 clusters Full Stand-alone operation operation (no operation (incl. (incl. coordination Energy production operation (no e-flow) e-flow) (incl. e-flow) e-flow) e-flow) (incl. e-flow) Firm Energy (GWh/year) 22,776 24,397 39,000 35,302 39,928 37,712 43,476 gain/loss (GWh/year) 1,621 ­3,697 4,626 2,410 8,173 gain/loss (%) 7% ­9% 13% 7% 23% Average Energy (GWh/year) 30,287 30,323 60,760 59,304 59,138 59,251 59,178 gain/loss (GWh/year) 37 ­1,456 ­166 ­53 ­126 gain/loss (%) 0% ­2% 0% 0% 0% Scenario for comparison 0 2 2A 2A 2A 27 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 2.6. Summary of firm energy generated in Scenario 0 ­ Scenario 2D 50,000 43,476 45,000 39,000 39,928 40,000 37,712 35,302 35,000 GWh/year 30,000 22,776 24,397 25,000 20,000 15,000 10,000 5,000 0 Scenario 0: Scenario 1: Scenario 2: Scenario 2A: Scenario 2B: Scenario 2C: Scenario 2D: stand-alone operation coordinated operation stand-alone operation stand-alone operation operation in 4 clusters operation in 2 clusters full coordination (no e- ow) (no e- ows) (no e- ow) (incl. e- ow) (incl. e- ow) (incl. e- ow) (incl. e- ow) Existing facilities SAPP HPPs development and investment be situated on the same main stem of the Zambezi Figure 2.7. Total Net Present Value of hydropower: River as Kariba Dam, the stretch of the river that is Scenario 1, 2, and 2A­2D equally shared by Zambia and Zimbabwe and under the management of ZRA. Coordinated operation 1,600 could be achieved in practice by operating Lake 1,400 Kariba to compensate for shortfalls in the energy 1,200 production of Batoka Gorge during the dry season. Total NPV (US$ m) 1,000 The proposed design criteria for Batoka Gorge Dam 800 provides limited storage capacity in relation to the 600 installed capacity of its HPPs. This would firm up 400 energy to serve the base load, especially in Zambia. 200 But as Kariba would operate at higher reservoir 0 levels on average in Scenario 2B than in Scenario Scenario 2C: operation in 2 clusters (incl. e- ow) Scenario 2D: full coordination (incl. e- ow) Scenario 1: coordinated operation (no e- ows) Scenario 2A: stand-alone operation (incl. e- ow) Scenario 2: stand-alone operation (no e- ow) Scenario 2B: operation in 4 clusters (incl. e- ow) 2A, surface evaporation could increase. The Itezhi Tezhi reservoir cannot respond im- mediately to an increase in flow demand from the downstream HPPs due to the attenuating affect of Existing facilities SAPP HPPs development and investment the Kafue Flats. Meanwhile, the Kafue Gorge Upper reservoir located downstream of the Flats, could feed the two HPPs downstream in series. Consider- ing that there is no significant inflow between the Operating HPPs in clusters existing Kafue Gorge Upper Dam (KGU) and pro- posed future Kafue Gorge Lower (KGL), Scenario When the Batoka Gorge Dam would be constructed 2A already optimizes this subsystem. Hence, the upstream of Lake Kariba and the Kariba Dam (exist- subsequent scenarios 2B to 2D showed no significant ing), and if the HPPs of the two dams were operated improvement in the generation of firm energy. in conjunction, their total generation of firm energy The Cahora Bassa Dam in Mozambique cur- of both could increase from 7,816 to 17,819 GWh per rently exports 1,050 MW to Eskom in South Africa year (i.e., additional 10,003 GWh per year). This rep- under a long-term contract (although more is resents a significant 70 percent potential increase in exported on average). Coordinated operation of firm energy production. Batoka Gorge Dam would Cahora Bassa and the planned Mphanda Nkuwa 28 The Development Scenarios HPPs could therefore be influenced by the com- analysis using such tools as the Web Analytics Solu- mitment to South Africa, and therefore, the firm tion Profiler (WASP) which is outside the scope of energy production capacity in this proposed clus- the MSIOA study. ter may be maximized since inflows are already Table 2.16. and 2.17, as well as figure 2.8. il- regulated. lustrate how energy production progresses with The Shire River and Lake Malawi/Niassa/ the development of scenarios 2, 2A to 2D. More Nyasa subsystem would primarily be made up of information on the HPPs is outlined in volume 3. existing and proposed run-of-the-river HPPs or dams with small reservoirs. Of these, only the gen- eration from the proposed Kholombizo Dam can be 2.8scenario3:idenTiFied forecasted with any accuracy as it would be located irrigaTionprojecTs immediately downstream of the Lake and there is only a small intervening catchment. Outflows Objective: To determine the impact of implement- from the Lake are directly related to lake levels. ing identified irrigation projects on the energy All other existing or future HPPs are, or would be production of existing system of independently either located on relatively minor streams in the operated HPPs. Lake Malawi/Niassa/Nyasa catchment or have a significant intervening catchment (if located on Features: Scenario 3 represents the implementation the Shire River downstream of Kholombidzo), thus and development of identified irrigation projects impeding accurate inflow forecasting. In addition, (IPs) in the ZRB. The impact of abstraction for IPs the proposed Rumakali Dam would be managed is assessed against the energy productivity of ex- by a different power utility than the other existing isting system of HPPs in Scenario 0 (not operated and proposed HPPs. Under these circumstances, in conjunction). Releases for e-flows (7,000 m3 per this subsystem was not included in Scenarios 2C second in February in the lower Delta) are included and 2D. as well as abstractions for domestic water supply. Quantifying more exact potential benefits from At present, the total equipped irrigation area in conjunctive operation of the HPPs as one fully in- the ZRB is approximately 183,000 hectares with a tegrated system necessitates a generation-planning total annual irrigated area of around 260,000 Figure 2.8. Change in firm energy production: from Scenario 2A to 2D 45,000 40,000 3,092 Malawi & Tanzania 35,000 All independants Lower Zambezi All systems 30,000 Cahora Bassa + 19,894 Mozambique + in coordinated 5,026 15,006 Mphanda Nkuwa Malawi operation Firm energy (GWh/yr) 25,000 43,476 20,000 9,680 7,446 Kafue River 15,000 2,301 Upper and 10,000 4,542 19,570 Middle Zambezi 2,84 Upper Zambezi Zambia + Zimbabwe 13,315 5,000 6,368 Kariba + Batoka Gorge 0 1,907 Scenario 2A Scenario 2B Scenario 2C Scenario 2D Kapichira Tedzani Nkula Falls Kholombidzo Lower Fufu Songwe III Songwe II Songwe I Rumakali Mphanda Nkuwa Cahora Bassa Kafue Gorge Lower Kafue Gorge Upper Ithezi Thezi Kariba Batoka Gorge 29 Table 2.16. Future firm energy production by HPPs under SAPP in the Zambezi River Basin Scenario 2D: full Scenario 2A: stand-alone Scenario 2C: operation in 2 clusters coordination operation (incl. e-flow) Scenario 2B: operation in 4 clusters (incl. e-flow) (incl. e-flow) (incl. e-flow) Firm Energy Firm Energy (GWh/year) Firm Energy (GWh/year) Firm Energy (GWh/year) (GWh/year) Hydropower plant Increase Increase Increase Batoka Gorge projected existing & 7,816 13,315 5,499 Kariba extension Itezhi Tezhi extension 15,056 18,957 3,901 19,570 613 Kafue Gorge refurbishment Upper 7,088 7,446 358 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Kafue Gorge projected 30 Lower existing & Cahora Bassa extension 14,685 15,006 321 Mphanda projected Nkuwa 35,302 39,928 4,626 37,712 ­2,216 43,476 5,764 Rumakali projected Songwe I projected Songwe II projected 18,556 18,913 357 19,894 981 Songwe III projected Lower Fufu projected 3,091 3,092 1 Kholombizo projected Nkula Falls existing Tedzani projected existing & Kapichira extension Table 2.17. Future energy production in the Zambezi River Basin Scenario 2A: stand-alone Scenario 2B: operation in 4 clusters Scenario 2C: operation in 2 clusters Scenario 2D: full coordination operation (incl. e-flow) (incl. e-flow) (incl. e-flow) (incl. e-flow) HPP - GWh/year HPP System of HPP - GWh/year HPP System of HPP - GWh/year HPP System of HPP - GWh/year Hydropower plant Firm Secondary Average total Firm Secondary Average total Firm Secondary Average total Firm Secondary Average Batoka Gorge projected 1,908 7,730 9,638 9,633 1,927 9,635 existing & 13,315 4,504 17,819 Kariba 6,368 1,992 8,360 8,186 1,789 8,168 extension Itezhi Tezhi extension 284 432 716 716 76 716 19,570 9,880 29,450 Kafue Gorge refurbishment 4,542 2,224 6,766 6,779 2,718 7,206 Upper 7,446 4,137 11,583 Kafue Gorge projected 2,301 1,791 4,092 4,088 1,005 3,830 Lower 31 existing & Cahora Bassa 9,680 4,524 14,204 14,117 6,172 14,004 extension 15,006 7,685 22,691 Mphanda projected 5,026 3,450 8,477 8,575 5,086 8,658 Nkuwa 43,476 15,702 59,178 Rumakali projected 686 299 985 985 -- 952 Songwe I projected 41 50 91 91 -- 80 Songwe II projected 277 213 490 490 -- 524 19,894 9,907 29,801 Songwe III projected 229 185 414 408 -- 433 Lower Fufu projected 134 510 644 645 134 645 3,092 3,953 7,045 Kholombizo projected 344 1,282 1,626 1,626 326 1,603 Nkula Falls existing 460 557 1,017 1,017 384 991 Tedzani projected 299 423 721 721 221 695 existing & Kapichira 541 522 1,063 1,063 444 1,040 extension The Development Scenarios The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis hectares.8 This includes 102,000 hectares of irri- percent and total average energy by nine percent. gated perennial crops (76 percent of which is used The estimated value of this reduction in energy for sugarcane production) and represents around production is $234 million per year. See section 2.8.3 56 percent of the total equipped area. Table 2.18 for more details. summarizes the areas under irrigation and further details on irrigation in the ZRB are outlined in 2.8.1 impactontotalaverageirrigationarea volume 4. Roughly 100 irrigation projects or programs9 The estimated total average irrigated area of 774,000 have been identified from various sources and hectares when IPs have been implemented, includes in consultation with stakeholders in the riparian 140,000 hectares of additional irrigated perennial countries. In the process of data collection, the es- crops (78 percent of which is planned for sugarcane), timated additional area represented by identified which is equivalent to roughly 42 percent of the IPs is 336,000 hectares of equipped irrigation area. total equipped area. Without the perennial crops, the projected irrigation areas have a mean cropping Findings: The results of Scenario 3 are compared intensity of 196 percent. Winter wheat represents 38 with Scenario 0 (Base Case ­ Current Situation). The percent of the projected irrigated winter crop areas estimated total equipped irrigation area in the ZRB (see tables 2.18. and 2.19. for details, including the increases from 183,000 in Scenario 0 to approximate- percentage of increase compared with Scenario 0). ly 519,000 hectares when IPs are included (Scenario Figure 2.9. illustrates the distribution and extent 3). The additional 336,000 hectares is equivalent to of total average irrigated area under Scenario 3 (i.e., a 184 percent increase in equipped irrigation area. area irrigated in the current situation, plus the ad- The estimated total average irrigated area ditional irrigated area of identified projects). in the ZRB (i.e., considering that one area can be cropped more than once a year), increases from approximately 260,000 to 774,000 hectares when Figure 2.9. Estimated total average irrigated area IPs are included (i.e., sum of winter, summer, and per country: Scenario 3 with current irrigation area perennially cropped areas). The additional 514,000 and Identified Projects hectares is equivalent to a 199 percent increase in the equipped irrigation area. See section 2.8.1 for 350,000 more details. 300,000 292,148 An increase in the total irrigated area would 250,000 lead to substantial creation of employment, ap- 200,000 proximately 250,000 additional jobs (i.e., eight mil- ha/year 150,000 145,846 135,920 lion person years) which would be geographically 115,846 distributed with the expanded and newly irrigated 100,000 areas. See section 2.8.2 for more details. 50,000 46,280 16,750 20,300 Scenario 3 has significant impact on the energy 590 0 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe sector in the ZRB due to necessary water abstrac- tions for the additional irrigation. Comparing Scenario 3 to the current situation in Scenario 0, the Country implementation of the identified IPs would decrease Irrigated area - current situation Additional irrigated area (IPs) the production of firm energy in the Basin by 21 8 The equipped area is the command area (irrigable area). The irrigated area is the one that is cropped; according to the inten- sity of use, an equipped area could be potentially used twice a year (intensity of 200 percent); for example one hectare of irri- gated wheat in the dry season may also be irrigated with complementary irrigation with one hectare of maize in the wet season. 9 A single identified irrigation program may include many smaller adjacent identified projects. For instance, "Rehabilitation/ optimization of the use of reservoirs in the Luenha subbasin in Zimbabwe" is considered one program even though it includes several different irrigation schemes. 32 The Development Scenarios Table 2.18. Current irrigation areas in Zambezi River Basin, by subbasin and country: Scenario 0 Irrigated (ha) Equipped (ha) Dry season (ha) Wet season (ha) Perennial (ha) Subbasin Kabompo (13) 595 350 245 245 105 Upper Zambezi (12) 3,250 2,500 1,750 750 750 Lungúe Bungo (11) 1,250 1,000 750 250 250 Luanginga (10) 1,000 750 500 250 250 Barotse (9) 340 200 140 140 60 Cuando/Chobe (8) 765 620 495 145 125 Kafue (7) 46,528 40,158 6,370 6,370 33,788 Kariba (6) 44,531 28,186 16,325 16,345 11,861 Luangwa (5) 17,794 10,100 7,935 7,694 2,165 Mupata (4) 21,790 14,200 7,589 7,590 6,611 Shire River ­ Lake Malawi/Niassa/Nyasa (3) 60,960 42,416 18,606 18,544 23,810 Tete (2) 52,572 35,159 19,411 17,413 15,748 Zambezi Delta (1) 7,664 6,998 666 666 6,332 Total 259,039 182,637 80,782 76,402 101,855 Country Angola 6,125 4,750 3,375 1,375 1,375 Botswana 0 0 0 0 0 Malawi 37,820 30,816 7,066 7,004 23,750 Mozambique 8,436 7,413 1,023 1,023 6,390 Namibia 140 120 120 20 0 Tanzania 23,140 11,600 11,540 11,540 60 Zambia 74,661 56,452 18,448 18,209 38,004 Zimbabwe 108,717 71,486 39,210 37,231 32,276 Total 259,039 182,637 80,782 76,402 101,855 Table 2.19. Identified irrigation projects (additional hectares to current irrigated area) Irrigated Increase Equipped Increase Dry season Wet season Perennial (ha) (%) (ha) (%) (ha) (ha) (ha) Subbasin Kabompo (13) 10,719 1,802 6,300 1,800 4,419 4,419 1,881 Upper Zambezi (12) 5,000 154 5,000 200 0 0 5,000 Lungúe Bungo (11) 625 50 500 50 375 125 125 Luanginga (10) 5,000 500 5,000 667 5,000 0 0 Barotse (9) 12,413 3,651 7,008 3,504 5,405 5,405 1,603 Cuando/Chobe (8) 450 59 300 48 300 150 0 Kafue (7) 20,520 44 13,610 34 6,910 6,910 6,700 Kariba (6) 184,388 414 119,592 424 64,796 69,096 50,496 Continued on next page 33 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.19. Identified irrigation projects (additional hectares to current irrigated area) (continued) Irrigated Increase Equipped Increase Dry season Wet season Perennial (ha) (%) (ha) (%) (ha) (ha) (ha) Luangwa (5) 11,063 62 6,130 61 4,933 4,933 1,197 Mupata (4) 8,566 39 5,860 41 2,706 2,706 3,154 Shire River - Lake Malawi/Niassa/Nyasa (3) 101,166 166 59,511 140 48,331 41,655 11,180 Tete (2) 55,621 106 30,336 86 25,285 25,285 5,051 Zambezi Delta (1) 99,110 1,293 77,055 1,101 22,055 22,055 55,000 Total 514,641 199 336,202 184 190,515 182,738 141,387 Country Angola 10,625 173 10,500 221 5,375 125 5,125 Botswana 20,300 0 13,800 0 6,500 10,800 3,000 Malawi 78,026 206 47,911 155 36,791 30,115 11,120 Mozambique 137,410 1,629 96,205 1,298 41,205 41,205 55,000 Namibia 450 321 300 250 300 150 0 Tanzania 23,140 100 11,600 100 11,540 11,540 60 Zambia 61,259 82 37,422 66 23,837 23,837 13,585 Zimbabwe 183,431 169 118,464 166 64,967 64,967 53,497 Total 514,641 199 336,202 184 190,515 182,738 141,387 A number of IPs withdraw water from the Zambezi, Kafue, and Shire rivers which have suf- Table 2.20. Supplementary regulation ficient water available all year round to satisfy the requirements for identified projects in Scenario 3 corresponding water demand. But other projects Supplementary are located on tributaries where the flow is too regulation low during the dry season to satisfy both irriga- Subbasin (million m3) tion demand and e-flows. There is also a need for Kabompo (13) 10 additional regulation of flow in addition to the Upper Zambezi (12) 15 existing regulation that provides water for cur- Lungúe Bungo (11) 0 rent irrigation schemes on the Kafue Flats (Itezhi Luanginga (10) 30 Tezhi), downstream of Lake Malawi/Niassa/ Nyasa, Kariba, and Cahora Bassa, including exist- Barotse (9) 0 ing small reservoirs along some of the Zimbabwean Cuando/Chobe (8) 0 tributaries. Kafue (7) 0 This regulation need is estimated to around Kariba (6) 20 254 million m3 for all of the associated irrigation Luangwa (5) 39 areas. The reservoirs listed in table 2.20. store wa- Mupata (4) 0 ter during the wet season for release during the Shire River ­ Lake Malawi/Niassa/Nyasa (3) 102 irrigation season and have been included in the Tete (2) 38 HEC model. The storage volume is the minimum Zambezi Delta (1) 0 regulation volume that meets the water demand of e-flows and irrigation at each control point of Total 254 the system. 34 The Development Scenarios 2.8.2 impactonemployment Table 2.21. Impact on employment by country Implementing the IPs included in Scenario 3 could (person years): Scenario 3 have significant impact on employment creation. An Country Person years estimated 250,000 additional jobs could be created (i.e., Angola 271 eight million person years). This accrues proportion- Botswana 486 ally to the investment in irrigation development across countries (table 2.21. and figure 2.10.), with Zimbabwe Malawi 1,338 and Mozambique experiencing the highest gains. Mozambique 2,009 Namibia 8 2.8.3 impactonenergyproduction Tanzania 416 Zambia 918 The development of all IPs included under Scenario Zimbabwe 2,634 3 results in a 21 percent decrease in firm energy pro- Total 8,080 duction compared with Scenario 0. The reductions vary among the individual HPP, and is illustrated in table 2.22. (e.g., 27 percent reduction at Kapichira, 26 percent reduction at Cahora Bassa and 11 percent reduction at Kariba). Figure 2.10. Impact on employment by country Total average energy production decreases by (person years): Scenario 3 nine percent from 30,287 to 27,629 GWh per year compared with Scenario 0. The fall in average en- 3,000 ergy is not as large as that of firm energy, indicating 2,500 Person years (million) a shift from firm to secondary energy, which low- 2,000 ers the overall economic benefits generated in the 1,500 hydropower sector. 1,000 500 0 2.8.4 impactonnpv Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe The annual economic impact of the reduction in hy- dropower is estimated to be $234 million when the Country identified irrigation projects are fully implemented. Table 2.22. Impact on energy production: Scenario 3 compared with Scenario 0 Energy production (GWh/year) Energy loss Scenario 0 Scenario 3 (%) Hydropower plant Firm Average Firm Average Firm Average Kariba 6,369 7,668 5,694 7,059 11 8 Kafue Gorge Upper 4,695 6,785 4,424 6,677 6 2 Cahora Bassa 11,922 13,536 8,804 11,609 26 14 Nkula Falls 462 1,017 442 1,011 4 1 Tedzani 300 721 282 716 6 1 Kapichira 542 560 395 557 27 1 System 22,776 30,287 18,052 27,629 21 9 35 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis The reduction in energy production is particularly troduction of irrigation is, however, gradual and the high for Cahora Bassa HPP (figure 2.11.), whereas fall in hydropower production has therefore been the gains in irrigation are centered on the irriga- proportioned according to the estimated implemen- tion expansion plans identified in Zimbabwe. In tation rate of irrigation projects. The total NPV for determining the NPV (table 2.23), the numbers for hydropower is estimated at being negative $873 mil- the HPPs are given as yearly productions. The in- lion, and for agriculture, a positive $527 million. This type of calculation is done for all scenarios involving irrigation. The economics of irrigation are based on Figure 2.11. Net present value by subbasin (US$ a number of farm models, which are distributed m): Scenario 3 compared with Scenario 0 across the Basin and relate to the planned increase in irrigation expansion (hectares). The input from 400 the farm models were integrated into the HEC-3 300 model. See volume 4 for further details. 200 100 0 NPV (US$ m) ­100 2.9scenario4:high-level ­200 irrigaTiondevelopMenT ­300 ­400 Objective: To determine the impact of implement- ­500 ing a set of ambitious high-level irrigation projects ­600 on the energy production of the existing system of Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake independently operated HPPs. Features: Scenario 4 represents the implementation and development of high-level national irrigation Subbasin projects (HLI) and the identified projects (IPs) Agriculture Hydropower Other sectors concurrently. The total estimated irrigated areas in Scenario 4 are thus the sum of areas of currently ir- rigated, IPs and HLI. The impact is assessed against the energy production of existing system of HPPs in Figure 2.12. Net present value by country (US$ m): Scenario 0 (without conjunctive operation). Releases Scenario 3 compared with Scenario 0 for e-flows (7,000 m3 per second in February in the 300 lower Delta) are included as well as abstractions for 200 domestic water supply. 100 Scenario 4 is based on the information provided 0 by riparian countries related to their not yet formal- ized, long-term and particularly ambitious irriga- NPV (US$ m) ­100 tion expansion strategies. The model shows that the ­200 water abstractions needed to realize these strategies ­300 may jeopardize water availability for other users, ­400 raising questions about feasibility. The assumptions ­500 in Scenario 4 are detailed in volume 4. ­600 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Findings: The estimated additional equipped ir- rigated area from implementing the high-level Country irrigation in Scenario 4 would increase the total Agriculture Hydropower Other sectors equipped irrigation area to approximately 1.73 mil- 36 The Development Scenarios Table 2.23. Net present value by subbasin and country (US$ m): Scenario 3 compared with Scenario 0 Hydropower Agriculture Other sectors Total Subbasin Kabompo (13) 0.00 7.60 0.00 7.60 Upper Zambezi (12) 0.00 2.40 0.00 2.40 Lungúe Bungo (11) 0.00 0.50 0.00 0.50 Luanginga (10) 0.00 2.70 0.00 2.70 Barotse (9) 0.00 8.40 ­0.09 8.30 Cuando/Chobe (8) 0.00 0.10 0.00 0.10 Kafue (7) ­135.80 39.60 ­0.010 ­96.20 Kariba (6) ­220.10 306.40 0.40 86.70 Luangwa (5) 0.00 6.60 0.00 6.60 Mupata (4) 0.00 16.90 0.00 16.90 Shire River ­ Lake ­43.60 ­5.70 ­3.57 ­52.90 Malawi/Niassa/Nyasa (3) Tete (2) ­472.90 52.70 ­1.62 ­421.80 Zambezi Delta (1) 0.00 88.50 27.78 116.20 Total ­872.50 526.80 22.90 ­322.80 Country Angola 0.00 5.60 0.00 5.60 Botswana 0.00 78.30 0.00 78.30 Malawi ­43.60 ­6.80 ­3.60 ­54.00 Mozambique ­472.90 121.80 26.20 ­324.90 Namibia 0.00 0.10 0.00 0.10 Tanzania 0.00 1.10 0.00 1.10 Zambia ­245.90 75.80 0.10 ­170.00 Zimbabwe ­110.10 250.90 0.20 141.00 Total ­872.50 526.80 22.90 ­322.80 lion hectares. This tremendous increase is equivalent The high-level irrigation Scenario 4 would to almost a tenfold increase of the equipped area in lead to substantial new employment, potentially the current situation of Scenario 0, and, a 230 per- creating more than one million jobs (i.e., 34 million cent increase of the total equipped area of Scenario person years). These jobs would be geographically 3 (table 2.24.). distributed across the expanded and new irrigated The implementation of the high-level irrigation areas. See section 2.9.2 for more details. scenario would increase the total irrigated area to Due to the necessary water abstractions for the approximately 2.8 million hectares. Similarly to the HLI in Scenario 4, energy productivity in the ZRB increase in the equipped area, this is equivalent to is significantly curtailed. Compared with energy more than a tenfold increase compared with the generation in the current situation of Scenario 0 current situation (Scenario 0), and roughly, a two (i.e., existing system of HPPs without conjunctive million additional hectares to when identified proj- operation) firm energy under Scenario 4 is reduced ects of Scenario 3 are implemented (table 2.24). See by 49 percent to 11,600 GWh per year, and, total section 2.9.1 for more details. average energy is reduced by 28 percent to 21,907 37 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis GWh per year. The estimated value of the energy intensity of 197 percent. Winter wheat represents 36 losses is $234 million per year. See section 2.9.3 for percent of the projected irrigated winter crop areas. more details. Figure 2.13. illustrates the distribution and extent of total irrigated area under Scenario 4 (i.e., 2.9.1 impactontotalirrigationarea area irrigated in the current situation, plus the ad- ditional irrigated area under IPs, plus the high-level Scenario 4 includes 360,000 hectares of additional irrigation predictions). irrigated perennial crops (65 percent of sugar- The supplementary regulation requirements cane), equivalent to around 30 percent of the total in Scenario 4 is estimated at approximately 3,000 equipped area. Without the perennial crops, the million m3 across the Basin (table 2.25.), represent- projected irrigation areas have a mean cropping ing around 12 times the regulation needs of the IPs. Table 2.24. Additional high-level irrigation areas (ha) compared with IPs by subbasin and country Additional Additional Additional Additional Additional irrigated equipped dry season wet season perennial area (ha) Increase (%) area (ha) Increase (%) (ha) (ha) (ha) Subbasin Kabompo (13) 17,014 159 10,000 159 7,014 7,014 2,986 Upper Zambezi (12) 12,500 250 10,000 200 7,500 2,500 2,500 Lungúe Bungo (11) 12,500 2,000 10,000 2,000 7,500 2,500 2,500 Luanginga (10) 12,500 250 10,000 200 7,500 2,500 2,500 Barotse (9) 17,713 143 10,000 143 7,713 7,713 2,287 Cuando/Chobe (8) 18,000 4,000 15,000 5,000 3,000 3,000 12,000 Kafue (7) 37,400 182 25,000 184 12,400 12,400 12,600 Kariba (6) 719,906 390 443,800 371 276,106 280,406 163,394 Luangwa (5) 44,957 406 25,000 408 19,957 19,957 5,043 Mupata (4) 0 0 0 0 0 0 0 Shire River ­ Lake 604,630 598 350,000 588 273,110 254,630 76,890 Malawi/Niassa/Nyasa (3) Tete (2) 400,000 719 200,000 659 200,000 200,000 0 Zambezi Delta (1) 125,000 126 100,000 130 25,000 25,000 75,000 Total 2,022,120 393 1,208,800 360 846,800 817,620 357,700 Country Angola 37,500 353 30,000 286 22,500 7,500 7,500 Botswana 20,300 100 13,800 100 6,500 10,800 3,000 Malawi 504,888 647 300,000 626 223,369 204,888 76,631 Mozambique 525,000 382 300,000 312 225,000 225,000 75,000 Namibia 18,000 4,000 15,000 5,000 3,000 3,000 12,000 Tanzania 99,741 431 50,000 431 49,741 49,741 259 Zambia 491,524 802 290,000 775 201,524 201,524 88,476 Zimbabwe 325,166 177 210,000 177 115,166 115,166 94,834 Total 2,022,119 393 1,208,800 360 846,800 817,619 357,700 38 The Development Scenarios 2.9.2 impactonemployment and employment. The impact on employment cre- ation for this scenario is estimated at approximately The ambitious development of the irrigation sector 1,131,000 additional jobs (i.e., 34 million person in Scenario 4 generates large agricultural benefits years). The geographic distributions of these job op- portunities are detailed in table 2.26. and figure 2.14. Figure 2.13. Estimated additional total average irrigated area in Scenario 4: current situation, 2.9.3 impactonenergyproduction identified projects and high-level irrigation development The effect of HLI on hydropower production in Scenario 4 is detailed in table 2.27. Compared with 800,000 670,734 the current situation in Scenario 0, the production 700,000 620,734 627,444 617,314 of firm energy falls with 49 percent, from 22,776 to 600,000 11,600 GWh per year. The drop is mainly driven by 500,000 the fall in energy production of HPPs with carry- ha/year 400,000 over reservoirs, namely Kariba and Cahora Bassa. 300,000 The average energy production in Scenario 4 is 200,000 146,021 21,907 GWh per year, which is equivalent to a 28 100,000 54,250 40,600 18,590 0 Table 2.26. Impact on employment by subbasin Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe (person years): Scenario 4 Country Country Person years Additional area: Additional area: Existing area: Angola 844 High-level irrigation Identi ed irrigation Current situation projects irrigation Botswana 0 Malawi 9,577 Mozambique 6,102 Table 2.25. Supplementary regulation requirements Namibia 177 for high-level irrigation projects in Scenario 4 Tanzania 2,209 Supplementary regulation Zambia 7,567 Subbasin (million m3) Zimbabwe 7,473 Kabompo (13) 35 Total 33,950 Upper Zambezi (12) 40 Lungúe Bungo (11) 35 Luanginga (10) 160 Figure 2.14. Impact on employment by country Barotse (9) 10 (person years): Scenario 4 Cuando/Chobe (8) 200 12,000 Kafue (7) 0 10,000 Person years (million) Kariba (6) 40 8,000 Luangwa (5) 70 6,000 4,000 Mupata (4) 0 2,000 Shire River ­ Lake Malawi/ 2,450 0 Niassa/Nyasa (3) Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Tete (2) 38 Zambezi Delta (1) 0 Country Total 3,078 39 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.27. Impact on energy production: Scenario 4 compared to Scenario 0 Energy production (GWh/year) Energy loss Scenario 0 Scenario 4 (%) Hydropower plant Firm Average Firm Average Firm Average Kariba 6,369 7,668 3,171 4,701 50 39 Kafue Gorge Upper 4,695 6,785 3,819 6,460 19 5 Cahora Bassa 11,922 13,536 4,949 8,622 58 36 Nkula Falls 462 1,017 272 936 41 8 Tedzani 300 721 173 651 42 10 Kapichira 542 560 102 537 81 4 System 22,776 30,287 11,600 21,907 49 28 percent decrease compared with the 30,287 GWh 2.10 scenario5:sapp per year of energy produced in Scenario 0. hydropowerplansand 2.9.4 impactonnpv idenTiFiedirrigaTionprojecTs The total economic loss due to the enormous drop Objective: To assess the impact of parallel imple- in the HPP system's energy production under mentation of the system of HPPs envisaged under Scenario 4 would exceeds the benefits gained from SAPP and identified irrigation projects, without any the high-level expansion in irrigation. The yearly basin-level coordination in either sector. economic loss compared to Scenario 0 is estimated at $597 million and the break-even point is at a firm Features: Scenario 5 incorporates the development energy price of approximately $0.04. of identified irrigation projects (IPs) and the system of independently operated HPP facilities under SAPP (the latter equivalent to Scenario 2A). Releases for e-flows (7,000 m3 per second in February in the Figure 2.15. Net present value by subbasin (US$ m): Scenario 4 compared to Scenario 0 1,500 Figure 2.16. Net present value by country (US$ m): 1,000 Scenario 4 compared to Scenario 0 500 NPV (US$ m) 1,000 0 ­500 500 NPV (US$ m) ­1,000 0 ­1,500 ­500 ­2,000 ­1,000 ­2,500 ­1,500 Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake ­2,000 ­2,500 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Subbasin Country Agriculture Hydropower Other sectors Agriculture Hydropower Other sectors 40 The Development Scenarios Table 2.28. Net present value by subbasin and country (US$ m): Scenario 4 compared to Scenario 0 Hydropower Agriculture Other sectors Total Subbasin Kabompo (13) 0.00 19.30 0.00 19.30 Upper Zambezi (12) 0.00 10.70 0.00 10.70 Lungúe Bungo (11) 0.00 9.20 0.00 9.20 Luanginga (10) 0.00 6.00 0.00 6.00 Barotse (9) 0.00 19.90 ­0.20 19.70 Cuando/Chobe (8) 0.00 ­3.60 0.00 ­3.60 Kafue (7) ­1,899.40 113.70 0.00 ­1,785.70 Kariba (6) ­639.10 1,026.00 ­1.20 385.70 Luangwa (5) 0.00 42.00 0.00 42.00 Mupata (4) 0.00 16.90 0.00 16.90 Shire River ­ Lake Malawi/Niassa/Nyasa (3) ­113.80 376.40 ­37.50 225.10 Tete (2) ­1,146.60 477.30 ­2.10 ­671.40 Zambezi Delta (1) 0.00 283.20 28.10 311.30 Total ­3,798.80 2,397.00 ­13.00 ­1,414.80 Country Angola 0.00 26.00 0.00 26.00 Botswana 0.00 ­2.30 0.00 ­2.30 Malawi ­113.80 369.00 ­37.50 217.70 Mozambique ­1,146.60 741.10 26.00 ­379.50 Namibia 0.00 ­3.60 0.00 ­3.60 Tanzania 0.00 7.30 0.00 7.30 Zambia ­2,219.00 557.90 ­0.90 ­1,662.00 Zimbabwe ­319.50 701.60 ­0.60 381.50 Total ­3,798.90 2,397.00 ­13.00 ­1,414.90 lower Delta) are included as well as abstractions for curve, the zone where power generation drops off domestic water supply. rapidly. Such results are to be expected, especially for run-of-the-river HPPs. Findings: The effect of adding IPs to the energy Overall average energy production also de- production of the system of HPP under SAPP is creases in Scenario 5, by four percent from 59,304 to detailed in table 2.29. At the basin-level, abstract- 56,993 GWh per year. Average energy loss is mar- ing additional water for the identified IPs would ginal for HPPs located in the Kafue subbasin, but reduce firm energy production by eight percent, rather significant for the HPPs located on the main from 35,302 to 32,358 GWh per year. The decrease stem of the Zambezi River (with the exception of in firm energy production varies between HPPs, the proposed Batoka Gorge Dam). The impact on where firm energy production diminishes drasti- energy in Scenario 5 is detailed in table 2.29. cally in the case of Songwe I and II, and Kapichira, The decrease in energy production when water for example. But firm energy is selected at the 99 is abstracted from the system for the additional IPs, percent point of the energy production duration leads to a negative NPV (table 2.31.). The absolute 41 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.29. Impact of IPs on HPP energy generation under SAPP: Scenario 5 compared with Scenario 2A Energy production (GWh/year) % Change in energy Scenario 2A Scenario 5 production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,907 9,638 1,660 9,479 ­13 ­2 Kariba existing and extension 6,369 8,360 5,694 7,709 ­11 ­8 Itezhi Tezhi extension 284 716 258 712 ­9 0 Kafue Gorge Upper refurbishment 4,542 6,766 4,424 6,677 ­3 0 Kafue Gorge Lower projected 2,301 4,092 2,239 4,036 ­3 0 Cahora Bassa existing and extension 9,680 14,204 8,804 13,449 ­9 ­5 Mphanda Nkuwa projected 5,026 8,477 4,554 8,063 ­9 ­5 Rumakali projected 686 985 670 966 ­2 ­2 Songwe I projected 41 90 29 75 ­29 ­17 Songwe II projected 277 490 228 436 ­18 ­11 Songwe III projected 229 414 197 378 ­14 ­9 Lower Fufu projected 134 645 134 645 0 0 Kholombizo projected 344 1,626 318 1,603 ­8 0 Nkula Falls existing 460 1,017 440 1,010 ­4 0 Tedzani existing 299 721 281 714 ­6 0 Kapichira existing and extension 541 1,063 394 1,041 ­27 ­2 Total 35,302 59,304 32,358 56,993 ­8 ­4 and relative fall in energy production, however, is not as significant as in Scenario 3. Similar to Table 2.30. Supplementary regulation requirements Scenario 3, the development of IPs would provide in Scenarios 5 and 5A substantial employment benefits, estimated at Supplementary regulation approximately 250,000 additional jobs (i.e., eight (million m3) million person years). Subbasin Scenario 5 Scenario 5A The regulation needs for Scenarios 5 is detailed Kabompo (13) 10 10 in table 2.30. (the same supplementary requirements Upper Zambezi (12) 15 0 apply to Scenario 5A). The table shows an overall Lungúe Bungo (11) 0 0 reduction in requirement, because there are no supplementary requirements in the Upper Zambezi Luanginga (10) 30 30 and Kariba subbasins. Barotse (9) 0 0 Cuando/Chobe (8) 0 0 Kafue (7) 0 0 2.11 scenario5a:sapp Kariba (6) 20 0 hydropowerplansand Luangwa (5) 39 39 coordinaTedidenTiFied Mupata (4) 0 0 Shire River ­ Lake Malawi/Niassa/ irrigaTionprojecTs Nyasa (3) 102 102 Tete (2) 38 38 Objective: To assess the impact of parallel imple- Zambezi Delta (1) 0 0 mentation of a system of independently operated Basin total 254 219 42 The Development Scenarios Figure 2.17. Net present value by subbasin Figure 2.18. Net present value by country (US$ m): (US$ m): Scenario 5 compared with Scenario 2A Scenario 5 compared with Scenario 2A 400 300 300 200 200 100 NPV (US$ m) NPV (US$ m) 100 0 0 ­100 ­100 ­200 ­200 ­300 ­300 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake Country Agriculture Hydropower Other sectors Subbasin Agriculture Hydropower Other sectors Table 2.31. Net present value by subbasin and country (US$ m): Scenario 5 compared with Scenario 2A Hydropower Agriculture Other sectors Total change Subbasin Kabompo (13) 0.00 7.60 0.00 7.60 Upper Zambezi (12) 0.00 2.40 0.00 2.40 Lungúe Bungo (11) 0.00 0.50 0.00 0.50 Luanginga (10) 0.00 2.70 0.00 2.70 Barotse (9) 0.00 8.40 ­0.10 8.30 Cuando/Chobe (8) 0.00 0.10 0.00 0.10 Kafue (7) ­101.10 39.60 ­0.00 ­61.50 Kariba (6) ­149.40 306.40 0.40 157.40 Luangwa (5) 0.00 6.6 0.00 6.60 Mupata (4) 0.00 16.9 0.00 16.90 Shire River ­ Lake Malawi/Niassa/Nyasa (3) ­44.30 ­5.70 ­3.80 ­53.80 Tete (2) ­232.00 52.70 ­0.30 ­179.50 Zambezi Delta (1) 0.00 88.50 ­37.50 51.00 Total ­526.80 526.80 ­41.20 ­41.20 Country Angola 0.00 5.60 0.00 5.60 Botswana 0.00 78.30 0.00 78.30 Malawi ­32.20 ­6.80 ­3.80 ­109.60 Mozambique ­232.00 121.80 ­37.80 ­147.90 Namibia 0.00 0.10 0.00 0.10 Tanzania ­12.10 1.10 0.00 ­11.00 Zambia ­175.80 75.80 0.10 ­33.10 Zimbabwe ­74.70 250.90 0.20 176.40 Total ­526.80 526.80 ­41.20 ­41.20 43 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis HPPs envisaged under SAPP, and identified irriga- Findings: In Scenario 5A, the production of firm tion projects which are coordinated at basin level. energy in the system of HPPs envisaged under SAPP increases as a result of optimized IPs (i.e., due to Features: Scenario 5A is based on the development increased water availability), with two percent from of coordinated identified IPs for sector optimiza- 32,358 to 33,107 GWh per year. The average energy tion (i.e., moving irrigated area from upstream to production also increases compared with Scenario downstream), as well as the development of the 5, by one percent to 57,468 GWh per year. Details system of independently operated hydropower are provided in table 2.35. facilities under SAPP (i.e., Scenario 2A). Releases The total equipped irrigation area in the ZRB for e-flows (7,000 m3 per second in February in the increases by 1.5 percent in Scenario 5A compared lower Delta) are included as well as abstractions for with Scenario 5 (from 518,839 to 526,336 hectares). domestic water supply. The increase in total average irrigated area is slightly Coordination in the irrigation sector in Scenario higher, approximately two percent (from 773,680 5A implies relocating 70 percent of the identified to 788,680 hectares). The impact is detailed in table sugar irrigation projects in the Upper Zambezi, 2.32., table 2.33. and table 2.34. Kafue, and Kariba (upstream of Lake Kariba) sub- Compared with Scenario 5, introducing op- basins downstream to the Zambezi Delta subbasin timization in irrigation leads to increased energy (approximately 28,000 hectares of sugarcane).10 production. This increase would equate to a positive Table 2.32. Total additional irrigated and equipped area (ha) from IPs: Scenario 5A compared with Scenario 5 Scenario 5 Scenario 5A Change in area (ha) Additional Additional Additional Additional equipped area irrigated area equipped area irrigated area Equipped area Irrigated area Subbasin (ha) (ha) (ha) (ha) (ha) (ha) Kabompo (13) 6,300 10,719 6,300 10,719 0 0 Upper Zambezi (12) 5,000 5,000 1,500 1,500 ­3,500 ­3,500 Lungúe Bungo (11) 500 625 500 625 0 0 Luanginga (10) 5,000 5,000 5,000 5,000 0 0 Barotse (9) 7,008 12,413 7,008 12,413 0 0 Cuando/Chobe (8) 300 450 300 450 0 0 Kafue (7) 13,610 20,520 9,011 15,921 ­4,599 ­4,599 Kariba (6) 119,592 184,388 99,643 164,438 ­19,949 ­19,950 Luangwa (5) 6,130 11,063 6,130 11,063 0 0 Mupata (4) 5,860 8,566 5,860 8,566 0 0 Shire River ­ Lake Malawi/ 59,511 101,166 59,511 101,166 0 0 Niassa/Nyasa (3) Tete (2) 30,336 55,621 30,336 55,621 0 0 Zambezi Delta (1) 77,055 99,110 105,104 127,159 28,049 28,049 Total additional area (IPs) 336,202 514,641 336,203 514,641 1 0 Total existing area 182,637 259,039 182,637 259,039 0 0 TOTAL 518,839 773,680 518,840 773,680 1 0 (current situation + IPs) 10 In Scenarios 3 and 5 (i.e., implementation of IPs with existing system of HPPs, and with implementation of HPPs under SAPP, respectively), irrigation projects are included in the water allocation model at the sites identified in existing feasibility or prefeasibility studies. 44 Table 2.33. Dry season, Perennial and Wet season crops per subbasin: Scenario 5A compared with Scenario 5 Dry season crops Perennial crops Wet season crops Winter Winter Winter Soy- Sor- Subbasin Wheat Winter rice maize Vegetables Beans cotton Other Sugar Tea Coffee Citrus Bananas Pasture Maize beans ghum Cotton Tobacco Rice Scenario 5 Kabompo (13) 2,455 0 0 1,145 0 0 819 0 0 0 409 0 1,472 1,596 0 0 0 859 0 Upper Zambezi (12) 0 0 0 0 0 0 0 5,000 0 0 0 0 0 0 0 0 0 0 0 Lungúe Bungo (11) 0 250 0 125 0 0 0 0 0 0 125 0 0 0 0 0 0 0 0 Luanginga (10) 0 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Barotse (9) 1,603 0 0 3,801 0 0 1 0 0 0 1,601 0 2 1,042 0 0 0 561 0 Cuando/Chobe (8) 0 150 0 150 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Kafue (7) 6,710 0 0 120 0 80 0 6,570 0 0 120 10 0 0 6,710 0 80 0 0 Kariba (6) 40,960 0 5,000 8,541 0 0 10,295 28,499 3,356 5,033 6,472 0 7,136 15,120 12,466 2,300 13,686 6,688 0 Luangwa (5) 4,258 0 0 370 235 0 70 0 0 0 584 0 613 3,019 0 0 0 1,474 0 Mupata (4) 1,610 0 0 777 0 0 319 905 107 1,260 670 0 213 523 332 0 434 321 0 Shire River ­ Lake Ma- 0 15,950 20,070 1,928 942 6,676 2,765 11,120 60 0 0 0 0 12,080 5,356 1,439 2,136 0 15,950 lawi/Niassa/Nyasa (3) Tete (2) 15,330 0 75 4,722 4,075 0 1,082 3,066 361 542 361 0 722 8,614 3,853 1,212 5,108 693 0 Zambezi Delta (1) 0 22,055 0 0 0 0 0 55,000 0 0 0 0 0 0 0 0 0 0 22,055 Total 72,926 43,405 25,145 21,680 5,252 6,756 15,352 110,160 3,883 6,835 10,341 10 10,158 41,994 28,717 4,951 21,444 10,596 38,005 % of winter crops 38% 23% 13% 11% 3% 4% 8% 45 % of summer crops 12% 8% 23% 16% 3% 12% 6% 21% % of perennial crops 78% 3% 5% 7% 0% 7% SCENARIO 5A Kabompo (13) 2,455 0 0 1,145 0 0 819 0 0 0 409 0 1,472 1,596 0 0 0 859 0 Upper Zambezi (12) 0 0 0 0 0 0 0 1,500 0 0 0 0 0 0 0 0 0 0 0 Lungúe Bungo (11) 0 250 0 125 0 0 0 0 0 0 125 0 0 0 0 0 0 0 0 Luanginga (10) 0 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Barotse (9) 1,603 0 0 3,801 0 0 1 0 0 0 1,601 0 2 1,042 0 0 0 561 0 Cuando/Chobe (8) 0 150 0 150 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Kafue (7) 6,710 0 0 120 0 80 0 1,971 0 0 120 10 0 0 6,710 0 80 0 0 Kariba (6) 40,960 0 5,000 8,541 0 0 10,295 8,550 3,356 5,033 6,472 0 7,136 15,120 12,466 2,300 13,686 6,688 0 Luangwa (5) 4,258 0 0 370 235 0 70 0 0 0 584 0 613 3,019 0 0 0 1,474 0 Mupata (4) 1,610 0 0 777 0 0 319 905 107 1,260 670 0 213 523 332 0 434 321 0 Shire River ­ Lake Ma- 0 15,950 20,070 1,928 942 6,676 2,765 11,120 60 0 0 0 0 12,080 5,356 1,439 2,136 0 15,950 lawi/Niassa/Nyasa (3) Tete (2) 15,330 0 75 4,722 4,075 0 1,082 3,066 361 542 361 0 722 8,614 3,853 1,212 5,108 693 0 Zambezi Delta (1) 0 22,055 0 0 0 0 0 83,049 0 0 0 0 0 0 0 0 0 0 22,055 Total 72,926 43,405 25,145 21,680 5,252 6,756 15,352 110,160 3,883 6,835 10,341 10 10,158 41,994 28,717 4,951 21,444 10,596 38,005 % of winter crops 38% 23% 13% 11% 3% 4% 8% % of summer crops 12% 8% 23% 16% 3% 12% 6% 21% % of perennial crops 78% 3% 5% 7% 0% 7% Note: Shaded fields indicate change between Scenario 5 and Scenario 5A. The Development Scenarios Table 2.34. Dry season, Perennial and Wet season crops per country: Scenario 5A compared with Scenario 5 Dry season crops Perennial crops Wet season crops Country Winter wheat Winter rice Winter maize Vegetables Beans Winter cotton Other Sugar Tea Coffee Citrus Bananas Pasture Maize Soybeans Sorghum Cotton Tobacco Rice SCENARIO 5 Angola 0 5,250 0 125 0 0 0 5,000 0 0 125 0 0 0 0 0 0 0 0 Botswana 0 0 5,000 1,500 0 0 0 0 0 0 3,000 0 0 5,000 2,000 2,300 0 0 0 Malawi 0 6,141 18,916 1,351 942 6,676 2,765 11,120 0 0 0 0 0 11,503 5,149 1,346 1,859 0 6,141 Mozambique 11,000 22,055 75 4,000 4,075 0 0 55,000 0 0 0 0 0 7,575 2,727 1,212 3,636 0 22,055 Namibia 0 150 0 150 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Tanzania 0 9,809 1,154 577 0 0 0 0 60 0 0 0 0 577 208 92 277 0 9,809 Zambia 16,066 0 0 6,330 235 80 1,126 6,570 0 1,101 3,393 10 2,511 6,333 6,710 0 80 3,258 0 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Zimbabwe 45,860 0 0 7,646 0 0 11,460 32,470 3,823 5,735 3,823 0 7,646 11,006 11,924 0 15,592 7,338 0 46 Total 72,926 43,405 25,145 21,680 5,252 6,756 15,352 110,160 3,883 6,835 10,341 10 10,158 41,994 28,717 4,951 21,444 10,596 38,005 SCENARIO 5A Angola 0 5,250 0 125 0 0 0 1,500 0 0 125 0 0 0 0 0 0 0 0 Botswana 0 0 5,000 1,500 0 0 0 0 0 0 3,000 0 0 5,000 2,000 2,300 0 0 0 Malawi 0 6,141 18,916 1,351 942 6,676 2,765 11,120 0 0 0 0 0 11,503 5,149 1,346 1,859 0 6,141 Mozambique 11,000 22,055 75 4,000 4,075 0 0 83,049 0 0 0 0 0 7,575 2,727 1,212 3,636 0 22,055 Namibia 0 150 0 150 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Tanzania 0 9,809 1,154 577 0 0 0 0 60 0 0 0 0 577 208 92 277 0 9,809 Zambia 16,066 0 0 6,330 235 80 1,126 1,971 0 1,101 3,393 10 2,511 6,333 6,710 0 80 3,258 0 Zimbabwe 45,860 0 0 7,646 0 0 11,460 12,520 3,823 5,735 3,823 0 7,646 11,006 11,924 0 15,592 7,338 0 Total 72,926 43,405 25,145 21,680 5,252 6,756 15,352 110,160 3,883 6,835 10,341 10 10,158 41,994 28,717 4,951 21,444 10,596 38,005 Note: Shaded fields indicate change between Scenario 5 and Scenario 5A. The Development Scenarios change in NPV by $140 million (table 2.36.). This ZRB. The distribution of NPV by country and by indicates that coordinated development of irriga- subbasin are illustrated in figure 2.19. and figure tion projects would improve the economic viability 2.20. The regulation requirements for Scenario 5A of water resources development investments in the are the same as for Scenario 5 (table 2.30.). Table 2.35. Impact of IPs with coordination on HPP energy generation under SAPP: Scenario 5A compared with Scenario 5 Energy production (GWh/year) % Change in energy Scenario 5 Scenario 5A production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,660 9,479 1,696 9,495 2 0 Kariba existing & extension 5,694 7,709 5,825 7,850 2 2 Itezhi Tezhi extension 258 712 258 712 0 0 Kafue Gorge Upper refurbishment 4,424 6,677 4,459 6,714 1 1 Kafue Gorge Lower projected 2,239 4,036 2,252 4,061 1 1 Cahora Bassa existing & extension 8,804 13,449 8,970 13,613 2 1 Mphanda Nkuwa projected 4,554 8,063 4,643 8,154 2 1 Rumakali projected 670 966 670 966 0 0 Songwe I projected 29 75 29 75 0 0 Songwe II projected 228 436 228 436 0 0 Songwe III projected 197 378 197 378 0 0 Lower Fufu projected 134 645 134 645 0 0 Kholombizo projected 318 1,603 318 1,603 0 0 Nkula Falls existing 440 1,010 440 1,010 0 0 Tedzani projected 281 714 281 715 0 0 Kapichira existing & extension 394 1,041 394 1,041 0 0 Total 32,358 56,993 33,107 57,468 2 1 Figure 2.19. Net present value by subbasin Figure 2.20. Net present value by country (US$ m): (US$ m): Scenario 5A compared with Scenario 5 Scenario 5A compared with Scenario 5 200 200 150 150 100 100 NPV (US$ m) 50 NPV (US$ m) 0 50 ­50 0 ­100 ­50 ­150 ­100 Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake ­150 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Subbasin Country Agriculture Hydropower Other sectors Agriculture Hydropower Other sectors 47 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.36. Net present value by subbasin and country (US$ m): Scenario 5A compared with Scenario 5 Hydropower Agriculture Other sectors Total change Subbasin Kabompo (13) 0.00 ­2.60 0.00 ­2.60 Upper Zambezi (12) 0.00 ­1.40 0.00 ­1.40 Lungúe Bungo (11) 0.00 ­0.30 0.00 ­0.30 Luanginga (10) 0.00 0.00 0.00 0.00 Barotse (9) 0.00 ­3.00 0.0 ­3.00 Cuando/Chobe (8) 0.00 0.00 0.00 0.00 Kafue (7) 27.70 ­18.10 0.00 9.60 Kariba (6) 35.60 ­101.70 0.10 ­66.00 Luangwa (5) 0.00 0.00 0.00 0.00 Mupata (4) 0.00 0.00 0.00 0.00 Shire River ­ Lake Malawi/Niassa/Nyasa (3) 3.30 0.00 ­0.00 3.30 Tete (2) 56.50 0.00 0.10 56.60 Zambezi Delta (1) 0.00 145.80 0.40 146.20 Total 123.10 18.70 0.50 142.10 Country Angola 0.00 ­1.80 0.00 ­1.80 Botswana 0.00 0.90 0.00 0.90 Malawi 1.20 0.00 ­0.00 1.10 Mozambique 56.50 145.80 0.40 202.70 Namibia 0.00 0.00 0.00 0.00 Tanzania 2.10 0.00 0.00 2.10 Zambia 45.50 ­24.50 0.10 21.00 Zimbabwe 17.80 ­101.90 0.10 ­84.00 Total 123.10 18.50 0.50 142.10 2.12 scenario6:sapp high-level potential irrigation). Scenario 6 is also based on implementing independently operated hydropowerplansandhigh- HPPs facilities under SAPP (Scenario 2A). Releases levelirrigaTiondevelopMenT for e-flows (7,000 m3 per second in February in the lower Delta) are included as well as abstractions for Objective: To assess the impact of parallel imple- domestic water supply. mentation of the system of HPPs envisaged under SAPP and a high-level of irrigation development Findings: The large water abstractions needed for (HLI), without any basin-level coordination in implementing the HLI projects reduces the energy either sector. productivity of the system of HPPs under SAPP. Firm energy production decreases by 37 percent to Features: Scenario 6 is based on high-level irriga- 22,282 GWh per year compared with 35,302 GWh tion development as in Scenario 4 (i.e., the sum per year in Scenario 2A (i.e., the system of HPPs of current irrigated area, plus IPs, plus additional under SAPP without any superimposed additional 48 The Development Scenarios Table 2.37. Impact of high-level irrigation on HPP energy generation under SAPP without any coordination: Scenario 6 compared with Scenario 2A Energy production (GWh/year) % Change in energy Scenario 2A Scenario 6 production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,907 9,637 1,099 9,123 ­42 ­5 Kariba existing & extension 6,369 8,361 3,171 5,255 ­50 ­37 Itezhi Tezhi extension 284 716 208 705 ­27 ­2 Kafue Gorge Upper refurbishment 4,542 6,766 3,811 6,460 ­16 ­5 Kafue Gorge Lower projected 2,301 4,092 1,924 3,913 ­16 ­4 Cahora Bassa existing & extension 9,680 14,204 4,967 10,361 ­49 ­27 Mphanda Nkuwa projected 5,026 8,476 2,511 6,347 ­50 ­25 Rumakali projected 686 985 670 966 ­2 ­2 Songwe I projected 41 91 32 75 ­23 ­18 Songwe II projected 277 490 237 439 ­15 ­10 Songwe III projected 229 414 201 381 ­12 ­8 Lower Fufu projected 134 645 134 645 0 0 Kholombizo projected 344 1,626 152 1,371 ­56 ­16 Nkula Falls existing 460 1,017 271 935 ­41 ­8 Tedzani projected 299 721 172 648 ­42 ­10 Kapichira existing & extension 541 1,063 103 880 ­81 ­17 Total 35,302 59,304 22,282 48,504 ­37 ­18 irrigation in the Basin). Average energy produc- Table 2.38. Supplementary regulation tion also decreases, by 18 percent to 48,504 GWh requirements in Scenarios 6 and Scenario 6A per year compared with Scenario 2A which has an average energy of 59,304 GWh per year. The results Supplementary regulation are detailed in table 2.37. The dramatic fall in hy- Scenario 6 Scenario 6A dropower productivity and the negative impact on (million m3) (million m3) other sectors suggests that Scenario 6 may not be Subbasin an economically viable option for water resources Kabompo (13) 35 35 investments in the Basin, despite the substantial Upper Zambezi (12) 40 0 impact in terms of additional employment.11 Lungúe Bungo (11) 35 35 The necessary regulation requirements in Sce- Luanginga (10) 160 160 nario 6 (and Scenario 6A) is slightly higher than the Barotse (9) 10 10 one required for Scenario 4, because of the new hydro- Cuando/Chobe (8) 200 200 power stations in the Shire River Basin are not negli- Kafue (7) 0 0 gible. The reallocation of planned irrigation schemes Kariba (6) 40 0 from upstream to downstream decreases regulation Luangwa (5) 70 70 requirements as more water is available year-round Mupata (4) 0 0 downstream (table 2.38.). Should more planned irri- Shire River ­ Lake Malawi/ gated area be transferred to downstream areas in the 2,700 2,700 Niassa/Nyasa (3) Basin, then regulation needs would reduce further. Tete (2) 38 38 Zambezi Delta (1) 0 0 Total 3,328 3,248 11 A detailed cost-benefit analysis of Scenario 6 is warranted. 49 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 2.21. Net present value by subbasin Figure 2.22. Net present value by country (US$ m): (US$ m): Scenario 6 compared with Scenario 2A Scenario 6 compared with Scenario 2A 1,500 1,000 1,000 500 500 0 0 NPV (US$ m) ­500 ­500 NPV (US$ m) ­1,000 ­1,000 ­1,500 ­1,500 ­2,000 ­2,000 ­2,500 ­2,500 Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake 3,000 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Subbasin Country Agriculture Hydropower Other sectors Agriculture Hydropower Other sectors Table 2.39. Net present value by subbasin and country (US$ m): Scenario 6 compared with Scenario 2A Hydropower Agriculture Other sectors Total change Subbasin Kabompo (13) 0.00 19.30 0.00 19.30 Upper Zambezi (12) 0.00 10.70 0.00 10.70 Lungúe Bungo (11) 0.00 9.20 0.00 9.20 Luanginga (10) 0.00 6.00 0.00 6.00 Barotse (9) 0.00 19.90 ­0.23 19.60 Cuando/Chobe (8) 0.00 ­3.60 0.00 ­3.60 Kafue (7) ­2,156.60 113.70 ­0.03 ­2,042.90 Kariba (6) ­622.20 1,026.00 1.72 405.50 Luangwa (5) 0.00 42.00 0.00 42.00 Mupata (4) 0.00 16.90 0.00 16.90 Shire River ­ Lake Malawi/Niassa/Nyasa (3) ­171.40 365.70 ­38.42 155.80 Tete (2) ­986.30 477.30 ­0.75 ­509.70 Zambezi Delta (1) 0.00 283.20 ­37.15 246.00 Total ­3,936.50 2,386.30 ­74.86 ­1,625.20 Country Angola 0.00 26.00 0.00 26.00 Botswana 0.00 ­2.30 0.00 ­2.30 Malawi ­109.78 358.30 ­38.42 ­1,758.10 Mozambique ­986.30 741.10 ­37.90 ­283.10 Namibia 0.00 ­3.60 0.00 ­3.60 Tanzania ­61.70 7.30 0.00 ­54.30 Zambia ­2,467.68 557.90 0.61 59.10 Zimbabwe ­311.10 701.60 0.86 391.40 Total ­3,936.56 2,386.30 ­74.85 ­1,624.90 50 The Development Scenarios 2.13 scenario6a:sapp Essentially, the high-level irrigation projects considered in Scenario 6 is retained but the same hydropowerplansand 28,000 hectares of sugarcane production is relocated coordinaTedhigh-level from upstream subbasins to the Zambezi Delta irrigaTiondevelopMenT subbasin (as with the relocated IPs in Scenario 5A). Objective: To assess the impact of parallel imple- Findings: The substantial water abstraction needed mentation of the system of HPPs envisaged under for HLI reduces energy production in the system of SAPP and basin-level coordinated high-level of HPPs under SAPP, similarly to Scenario 6. However, irrigation development (HLI). the optimized HLI development when relocating irrigated areas from upstream to downstream in- Features: Scenario 6A is based on the coordinated creases both firm and average energy production. development of high-level irrigation projects for sec- Compared with Scenario 6, firm energy production tor optimization (i.e., rellocating irrigated area from increases by three percent from 22,828 to 22,917 upstream to downstream), as well as the develop- GWh per year. Average energy production increases ment of the system of independently operated HPP by one percent from 48,504 to 49,020 GWh per year. facilities under SAPP (i.e., Scenario 2A). Releases Details are provided in table 2.40. for e-flows (7,000 m3 per second in February in the The benefit of cooperation (additional NPV lower Delta) are included as well as abstractions for compared with Scenario 6) for this level of irrigation domestic water supply. development is estimated at $264 million. Coopera- Table 2.40. Impact of coordinated high-level irrigation on HPP energy generation under SAPP: Scenario 6A compared with Scenario 6 Energy production (GWh/year) % Change in energy Scenario 6 Scenario 6A production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,099 9,123 1,125 9,140 2 0 Kariba existing & extension 3,171 5,255 3,311 5,396 4 3 Itezhi Tezhi extension 208 705 208 705 0 0 Kafue Gorge Upper refurbishment 3,811 6,460 4,030 6,518 6 1 Kafue Gorge Lower projected 1,924 3,913 2,035 3,944 6 1 Cahora Bassa existing & extension 4,967 10,361 5,151 10,535 4 2 Mphanda Nkuwa projected 2,511 6,347 2,608 6,440 4 1 Rumakali projected 670 966 670 966 0 0 Songwe I projected 32 75 32 75 0 0 Songwe II projected 237 439 237 439 0 0 Songwe III projected 201 381 203 381 1 0 Lower Fufu projected 134 645 134 645 0 0 Kholombizo projected 152 1,371 152 1,371 0 0 Nkula Falls existing 271 935 271 935 0 0 Tedzani projected 172 648 172 652 0 0 Kapichira existing & extension 103 880 103 880 0 0 Total 22,282 48,504 22,917 49,022 3 1 51 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 2.23. Net present value by subbasin Figure 2.24. Net present value by country (US$ m): (US$ m): Scenario 6A compared with Scenario 6 Scenario 6A compared with Scenario 6 200 200 150 150 100 100 NPV (US$ m) 50 NPV (US$ m) 0 50 ­50 0 ­100 ­50 ­150 ­100 Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake ­150 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Subbasin Country Agriculture Hydropower Other sectors Agriculture Hydropower Other sectors tion introduces substantial economic benefits, al- for e-flows (7,000 m3 per second in February in the beit under the very ambitious irrigation expansion. lower Delta) are included as well as abstractions for However, these benefits in terms of estimated NPV domestic water supply. The other projects fall into are not enough to compensate for the loss in energy two categories elaborated below in section 2.14.1. production detailed in Scenario 6 (see table 3.4.) and the investment options may not be viable.12 In less Findings: The effect of the additional water with- ambitious expansion plans, this kind of cooperation drawals for other projects is comparatively limited. In can be very beneficial, as illustrated in Scenarios 5 Scenario 7, firm energy is 32,024 GWh per year and av- and 5A. Regulation needs for Scenario 6A is the erage energy is 56,596. Compared to Scenario 5, which same as for Scenario 6 (table 2.38.). did not incorporate other projects, this is equivalent to a one percent reduction in both (table 2.43.). The total employment effect is estimated at 2.14 scenario7:sapp approximately 275,000 additional jobs (i.e., eight million person years). The majority of new jobs hydropower,idenTiFied are created in the agricultural sector as a result of irrigaTionprojecTsand expanded irrigation and agricultural productivity. oTherprojecTs 2.14.1 otherprojects:waterabstraction Objective: To assess the impact of parallel imple- forurbanwatersupplyandmining mentation of the system of HPPs envisaged under SAPP, identified irrigation projects, and other proj- The other projects considered in Scenario 7 broadly ects abstracting water from the system. falls into two categories: firstly, water transfer for primarily urban water supply (and agriculture in Features: Scenario 7 introduces other projects with the case of the Chobe/Zambezi Transfer Scheme water abstraction requirements to the model, in ad- in Botswana); and secondly, for water transfer for dition to the development of the system of HPPs en- coal-fired thermal plants and associated mines. visaged under SAPP and the identified IPs (without any coordinated operation in either sector). Releases 12 A detailed cost-benefit analysis is warranted. 52 The Development Scenarios Table 2.41. Net present value by subbasin and country (US$ m): Scenario 6A compared with Scenario 6 Hydropower Agriculture Other sectors Total change Subbasin Kabompo (13) 0.00 ­2.60 0.00 ­2.60 Upper Zambezi (12) 0.00 ­0.20 0.00 ­0.20 Lungúe Bungo (11) 0.00 ­0.30 0.00 ­0.30 Luanginga (10) 0.00 0.00 0.00 0.00 Barotse (9) 0.00 ­3.00 0.00 ­3.00 Cuando/Chobe (8) 0.00 0.00 0.00 0.00 Kafue (7) 99.70 ­18.10 0.00 81.60 Kariba (6) 29.10 ­100.40 0.10 ­71.20 Luangwa (5) 0.00 0.00 0.00 0.00 Mupata (4) 0.00 0.00 0.00 0.00 Shire River ­ Lake Malawi/Niassa/Nyasa (3) 2.50 0.00 0.30 2.70 Tete (2) 46.40 0.00 ­0.50 46.00 Zambezi Delta (1) 0.00 145.80 65.30 211.10 Total 178.00 21.00 65.00 264.00 Country Angola 0.00 ­0.60 0.00 ­0.60 Botswana 0.00 2.30 0.00 2.30 Malawi ­0.30 0.00 0.30 0.00 Mozambique 46.40 145.80 64.80 257.00 Namibia 0.00 0.00 0.00 0.00 Tanzania 2.70 0.00 0.00 2.70 Zambia 114.30 ­24.60 0.10 89.80 Zimbabwe 14.60 ­101.90 0.00 ­87.30 Total 178.00 21.00 65.00 264.00 Water transfer for urban water supply and ag- and agricultural use (Zambezi Integrated Agro- riculture: Commercial Development Project). · Water transfer to the City of Bulawayo in Southern · The Chobe/Zambezi Transfer Scheme in Botswana Zimbabwe, to which water would be supplied plans to abstract water from the Zambezi to a dam on the Munyati River near its conflu- River via a pipeline and transport water to the ence with the Sanyati River (a project has been Dikgatlhong reservoir (in connection with the proposed to pump 1.4 m3 per second from the North-South Carrier Water Project). An esti- Zambezi River to meet the growing water de- mated 800 million m3 per year of water would mand [SWECO 1996]); and be made available to meet water demands by · Water transfer to the City of Lusaka from the Ka- the year 2020 for domestic, industrial, mining, fue River, upstream of the Kafue Gorge Upper reservoir, to supplement the existing pipeline by 13 In addition to the coal-fired thermal plants and mines listed, there is a number of copper mines in the Copperbelt (Kafue River subbasin in Zambia) that operate, withdrawing and (through mine dewatering) restitute water to the watershed. The 53 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis a second one whose capacity will be six m3 per In addition to water consumption during the second (Lusaka City Master Plan, 2009). cooling process, water is also consumed during the coal-extraction process, and the volume consumed Water abstraction for coal-fired thermal plants can vary considerably depending on whether water and associated mines:13 is used to control dust or for other purposes. In com- parison, studies of water consumption in Australian · Maamba in Zambia mines indicate that water consumption varies in the · Gokwe in Zimbabwe range of 200­800 liter per ton of extracted coal. Vale, · Moatize and Benga in Mozambique the owner of the Moatize complex in the Lower Zam- bezi in Mozambique, indicated that the average water Although thermal power stations have varying consumption of the mining complex would be 320 cooling water requirements depending on whether liters per second. It is estimated that the mine would they use once-through cooling or cooling towers, it extract 8.9 million tons of coal per year to supply the is not quantity of water per se but water consump- thermal power station; hence, water consumption of tion through associated evaporation that has most 1,140 liters per second is on the high side. impact on water consumption by the plants. Most Since data and information obtained on water of the water processed using once-through cooling consumption from the owners of mine-cum-ther- will go back to the river; thus, the water require- mal-power-station complexes were insufficient, ment is in the range of 80­240 m3 per megawatt estimates are based on the information provided in hour (MWh) produced, provided that the power available publications and presentations.14 plant is close to the river. The power plants that are Table 2.42. presents water withdrawal estimates located further away from the river adopt cooling based on available information and the following towers and, hence, their water requirements and assumptions: consumption decrease considerably, to two to three m3 of water per MWh produced. This is the case for · Plant factor of 0.88; Gokwe, for example, where water will be drawn · Coal consumption of 480 tons/GWh; from Lake Kariba through an 85 km long canal to · Water consumption of one m3 per ton for coal cool the turbines. Yet water consumption is only in extraction; and the order of 1.2­2.0 m3 per MWh produced (Freed- · Water consumption for power plant cooling of man and Wolfe 2007, World Nuclear Association). 1.85 m3/MWh. Table 2.42. Water consumption at mines and thermal power stations Installed capacity Coal input (million Mine consumption Plant cooling Total consumption Project (MW) tons/year) (m3/s) consumption (m3/s) (m3/s) Maamba 200 0.7 0 0.1 0.1 Gokwe 1,400 5.2 0.2 0.6 0.8 Moatize 2,400 8.9 0.3 1.1 1.4 Benga 2,000 7.4 0.2 0.9 1.1 current and future situation of mining development or mine closure has not been determined for the purpose of this study. Yet the water transfer amounts are relatively large. For example, in 1992­93, the Zambia Consolidated Copper Mines Ltd (ZCCM) pumped on average, 8.5 m3/s (Naish 1993), most of which probably came from dewatering the Konkola mine. 14 Freedman and Wolfe 2007; Naish 1993; presentation on power generation options given by Mr. O. Nyatanga, general man- ager, Corporate Affairs of ZESA Holdings (Pvt) Ltd (for information on Gokwe thermal plant in Zimbabwe), and Chubu Electric Power Co., July 2009 report and the Generation Planning Seminar held in Lusaka on October 22, 2009 (for information on Maamba coal mine in Zambia). 54 The Development Scenarios 2.14.2 impactonenergyproduction tion for both firm and average energy production. Compared to Scenario 2A, where only the system As table 2.43. outlines, introducing the abstractions of HPP under SAPP is developed (i.e., it does not for other projects results in a one percent reduc- include IPs or other projects), the loss in energy Table 2.43. Impact on energy production by other projects: Scenario 7 compared with Scenario 5 Energy production (GWh/year) % Change in energy Scenario 5 Scenario 7 production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,660 9,479 1,618 9,453 ­3 0 Kariba existing & extension 5,694 7,709 5,624 7,668 ­1 ­1 Itezhi Tezhi extension 258 712 258 712 0 0 Kafue Gorge Upper refurbishment 4,424 6,677 4,292 6,581 ­3 ­1 Kafue Gorge Lower projected 2,239 4,036 2,168 3,974 ­3 ­2 Cahora Bassa existing & extension 8,804 13,449 8,585 13,344 ­2 ­1 Mphanda Nkuwa projected 4,554 8,064 4,457 7,996 ­2 ­1 Rumakali projected 670 966 670 966 0 0 Songwe I projected 29 75 29 75 0 0 Songwe II projected 228 436 228 436 0 0 Songwe III projected 197 378 197 378 0 0 Lower Fufu projected 134 645 134 645 0 0 Kholombizo projected 318 1,603 318 1,603 0 0 Nkula Falls existing 440 1,010 440 1,010 0 0 Tedzani projected 281 713 281 714 0 0 Kapichira existing & extension 394 1,041 394 1,041 0 0 Total 32,358 56,993 32,024 56,596 ­1 ­1 Table 2.44. Impact on energy production by other projects and IPs: Scenario 7 compared with Scenario 2A Energy production (GWh/year) % Change in energy Scenario 2A Scenario 7 production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,908 9,637 1,618 9,453 ­15 ­2 Kariba existing & extension 6,368 8,360 5,624 7,668 ­12 ­8 Itezhi Tezhi extension 284 716 258 712 ­9 0 Kafue Gorge Upper refurbishment 4,542 6,766 4,292 6,581 ­5 ­3 Kafue Gorge Lower projected 2,301 4,092 2,168 3,974 ­6 ­3 Cahora Bassa existing & extension 9,680 14,204 8,585 13,344 ­11 ­6 Mphanda Nkuwa projected 5,026 8,477 4,457 7,996 ­11 ­6 Rumakali projected 686 985 670 966 ­2 ­2 Songwe I projected 42 91 29 75 ­29 ­17 Continued on next page 55 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.44. Impact on energy production by other projects and IPs: Scenario 7 compared with Scenario 2A Table 2.44. Impact on energy production by other projects and IPs: Scenario 7 compared with Scenario 2A (continued) Energy production (GWh/year) % Change in energy Scenario 2A Scenario 7 production Hydropower plant Firm Average Firm Average Firm Average Songwe II projected 276 490 228 436 ­18 ­11 Songwe III projected 228 414 197 378 ­14 ­9 Lower Fufu projected 134 645 134 645 0 0 Kholombizo projected 344 1,626 318 1,603 ­8 ­1 Nkula Falls existing 460 1,017 440 1,010 ­4 ­1 Tedzani projected 299 721 281 714 ­6 ­1 Kapichira existing & extension 541 1,063 394 1,041 ­27 ­2 Total 35,302 59,304 32,024 56,596 ­9 ­5 productivity is greater. Specifically, firm energy falls with Scenario 2A according to the model (table by nine percent and average energy by five percent 2.45.). The other water transfer projects yield a posi- as presented in table 2.44. tive NPV under the given assumptions.15 However, Scenario 7 still has a positive NPV if compared with 2.14.3 impactonnpv the current situation in Scenario 0 ($116 million), suggesting viability in the associated investments. The fall in energy production results in a corre- More detailed assessment of the economic and social sponding decrease in NPV in Scenario 7 compared benefits of the water transferring projects in Scenario Figure 2.25. Net present value by subbasin Figure 2.26. Net present value by country (US$ m): (US$ m): Scenario 7 compared with Scenario 2A Scenario 7 compared with Scenario 2A 400 300 300 200 200 100 100 US$ m 0 US$ m 0 ­10 ­200 ­100 ­300 ­200 Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake ­300 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Subbasin Country Agriculture Hydropower Other sectors Other projects Agriculture Hydropower Other sectors Other projects 15 The price for water supplied is particularly important for economic evaluation of the projects. In the case of the transfer to Bulawayo in Zimbabwe, two dollars per m3 was applied on the basis of the range of values given in the feasibility study. In the Chobe/Zambezi transfer in Botswana, a long-run marginal cost (LRMC) price of $0.68 per m3 was used. 56 The Development Scenarios Table 2.45. Net present value by subbasin and country (US$ m): Scenario 7 compared with Scenario 2A Hydropower Agriculture Other sectors Other projects Total change Subbasin Kabompo (13) 0.00 7.60 0.00 0.00 7.60 Upper Zambezi (12) 0.00 2.40 0.00 0.00 2.40 Lungúe Bungo (11) 0.00 0.50 0.00 0.00 0.50 Luanginga (10) 0.00 2.70 0.00 0.00 2.70 Barotse (9) 0.00 8.40 ­0.09 0.00 8.30 Cuando/Chobe (8) 0.00 0.10 0.00 0.00 0.10 Kafue (7) ­122.20 39.60 ­0.01 ­10.10 ­92.70 Kariba (6) ­164.80 306.40 0.84 42.70 185.20 Luangwa (5) 0.00 6.60 0.00 0.00 6.60 Mupata (4) 0.00 16.90 0.00 0.00 16.90 Shire River ­ Lake Malawi/Niassa/Nyasa (3) ­48.50 ­5.70 ­3.75 0.00 ­58.00 Tete (2) ­260.40 52.70 ­0.11 0.00 ­207.80 Zambezi Delta (1) 0.00 88.50 ­37.50 0.00 51.00 Total ­595.90 526.70 ­40.62 32.60 ­77.20 Country Angola 0.00 5.60 0.00 0.00 5.60 Botswana 0.00 78.30 0.00 1.30 79.60 Malawi ­35.24 ­6.80 ­3.75 0.00 ­126.30 Mozambique ­260.00 121.80 ­37.62 0.00 ­176.20 Namibia 0.00 0.10 0.00 0.00 0.10 Tanzania ­13.30 1.10 0.00 0.00 ­12.20 Zambia ­204.62 75.80 0.33 45.20 ­2.80 Zimbabwe ­82.40 250.90 0.42 ­13.80 155.00 Total ­595.56 526.80 ­40.62 32.70 ­77.20 7, and their economic viability would require more Objective: To assess the impact of balancing multi- complete analysis and full feasibility studies. sector development projects. The water-using activi- ties considered in Scenario 8 include: the system of HPPs envisaged under SAPP, identified irrigation 2.15 scenario8:MulTi-secTor projects, other projects (per Scenario 7), and, flood protection in the Lower Zambezi. developMenT Features: Scenario 8 represents a more balanced Due consideration to the importance of water for eco- approach to development of the Basin's water re- nomic, social and environmental development, requires a sources by incorporating multi-sector development multi-sector approach when analysing the Basin's water objectives and options. The scenario is based on the resources. The approach shown in Scenario 8 represents system of HPPs envisaged under SAPP, identified the attempt to meet multiple objectives, whilst at the same IPs, other projects as outlined in Scenario 7 and, time, illustrating potentials of benefit sharing as well as flood protection downstream of Lupata Gorge at inherent issues of trade-off between sectors. the confluence of the Shire and Zambezi River. As 57 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis with previous scenarios, releases for e-flows (7,000 m3 per second in the lower Delta in February) and Table 2.46. Supplementary regulation abstractions for domestic water supply are included. requirements in Scenarios 8 and Scenario 9 Supplementary regulation Findings: To impact of introducing multi-sector Scenario 8 Scenario 9 water users on the production of hydropower (million m3) (million m3) generated by the system of HPPs under SAPP is Subbasin presented in table 2.47. (Scenario 8 compared with Kabompo (13) 10 50 Scenario 2A). Firm energy production in Scenario Upper Zambezi (12) 15 15 8 is 30,013 GWh per year and average energy pro- Lungúe Bungo (11) 0 10 duction is 55,857 GWh per year. Compared with Luanginga (10) 30 45 Scenario 2A, which does not include multi-sector Barotse (9) 0 5 water use, these are equivalent to seven and six Cuando/Chobe (8) 0 0 percent reduction respectively. At the same time, Kafue (7) 0 20 Scenario 8 yields considerable employment ben- Kariba (6) 20 20 efits with an estimated 275,000 additional jobs Luangwa (5) 39 39 (i.e., eight million person years). The approach of Mupata (4) 0 0 considering multiple sectors and objectives also Shire River - Lake Malawi/ indicates higher agricultural productivity through 102 83 Niassa/Nyasa (3) the expansion in irrigated areas. Possible trade-offs Tete (2) 38 38 between sector need further analysis and involve Zambezi Delta (1) 0 0 decision making in the spirit of cooperation and Total 254 325 agreed solutions. Table 2.47. Impact on energy production in a multi-sector development context: Scenario 8 compared with Scenario 2A Energy production (GWh/year) % Change in energy Scenario 2A Scenario 8 production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,908 9,637 1,618 9,453 ­15 ­2 Kariba existing & extension 6,368 8,360 5,624 7,668 ­12 ­8 Itezhi Tezhi extension 284 716 258 712 ­9 0 Kafue Gorge Upper refurbishment 4,542 6,766 4,292 6,581 ­5 ­3 Kafue Gorge Lower projected 2,301 4,092 2,168 3,974 ­6 ­3 Cahora Bassa existing & extension 9,680 14,204 7,420 12,725 ­23 ­10 Mphanda Nkuwa projected 5,026 8,477 3,867 7,876 ­23 ­7 Rumakali projected 686 985 670 966 ­2 ­2 Songwe I projected 42 91 29 75 ­29 ­17 Songwe II projected 276 490 228 436 ­18 ­11 Songwe III projected 228 414 197 378 ­14 ­9 Lower Fufu projected 134 645 134 645 0 0 Kholombizo projected 344 1,626 318 1,603 ­8 ­1 Nkula Falls existing 460 1,017 440 1,010 ­4 ­1 Tedzani projected 299 721 281 714 ­6 ­1 Kapichira existing & extension 541 1,063 394 1,041 ­27 ­2 Total 35,302 59,304 30,013 55,857 ­7 ­6 58 The Development Scenarios Figure 2.27. Net present value by subbasin Figure 2.28. Net present value by country (US$ m): (US$ m): Scenario 8 compared with Scenario 2A Scenario 8 compared with Scenario 2A 400 300 300 200 200 100 100 0 US$ m 0 ­10 US$ m ­200 ­100 ­300 ­200 ­400 ­500 ­300 Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake ­400 ­500 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Subbasin Country Agriculture Hydropower Other sectors Other projects Flood protection Agriculture Hydropower Other sectors Other projects Flood protection The flood protection regime estimated for the 8, the more balanced multi-sector development lower Delta could bring a number of significant socio- scenario. These development activities include: the economic and environmental benefits. The "unpre- system of HPPs envisaged under SAPP, identified dictable" nature of the current flooding regime in the IPs, other projects as outlined in Scenario 7, and, Lower Zambezi has profound effect on subsistence flood protection downstream of Lupata Gorge at the production systems, and by preventing hazardous confluence of the Shire and Zambezi River. Releases floods, a protection regime would improve liveli- for e-flows (7,000 m3 per second in the lower Delta hoods, economic activities and ecosystem sustain- in February) and abstractions for domestic water ability across the Delta. The value of such benefits supply are included. has only partially been estimated in the model by The basic parameters of climate change in estimating avoided losses in agricultural production Scenario 9 are change in mean air temperature and infrastructure. The substantial scope of social and estimated evaporation rates. These are used and environmental benefits have not been quantified to assess the percentage change in basin yield and in the analysis and therefore not included explicitly irrigation deficits for the year 2030. The climate in the NPV calculations detailed in Table 2.48. change scenario has been simulated with one of Supplementary regulation requirements for the global climate simulation models. The results Scenario 8 (and Scenario 9) increases in some of are presented in table 2.49. and further detail can the upstream subbasins but decreases in the down- be found in volume 4. stream ones (table 2.46.). The findings of Scenario 9 should be treated with caution due to the limitations with the model and available data. More detailed analysis and studies 2.16 scenario9:poTenTial are warranted and would benefit the riparian coun- iMpacToFcliMaTechange tries in their adaptation and mitigation planning. Objective: To assess the potential impact of climate Findings: When the impact of climate change on change on the balanced multi-sector development water resources in the ZRB are modeled according to Scenario 8. the selected broad parameters, the impact on energy productivity is substantial. Compared to Scenario 8, Features: Scenario 9 applies a set of simulated pa- firm energy falls by 32 percent from 30,013 to 20,270 rameters of potential climate change onto Scenario GWh per year. Similarly, a significant reduction is 59 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.48. Net present value by subbasin and country: Scenario 8 compared with Scenario 2A Other Other Flood Hydropower Agriculture sectors projects protection Total change Subbasin Kabompo (13) 0.00 7.65 0.00 0.00 0.00 7.65 Upper Zambezi (12) 0.00 2.37 0.00 0.00 0.00 2.37 Lungúe Bungo (11) 0.00 0.53 0.00 0.00 0.00 0.53 Luanginga (10) 0.00 2.69 0.00 0.00 0.00 2.69 Barotse (9) 0.00 8.42 0.00 0.00 0.00 8.42 Cuando/Chobe (8) 0.00 0.08 0.00 0.00 0.00 0.08 Kafue (7) ­193.25 39.60 0.00 ­10.11 0.00 ­163.76 Kariba (6) ­237.90 306.43 0.28 42.71 0.00 111.52 Luangwa (5) 0.00 6.58 0.00 0.00 0.00 6.58 Mupata (4) 0.00 16.91 0.00 0.00 0.00 16.91 Shire River ­ Lake Malawi/Niassa/Nyasa (3) ­73.32 ­5.68 ­0.35 0.00 0.00 ­79.35 Tete (2) ­393.55 52.75 0.99 0.00 0.00 ­339.81 Zambezi Delta (1) 0.00 88.46 ­39.28 0.00 72.67 121.85 Total ­898.01 526.78 ­38.36 32.59 72.67 ­304.33 Country Angola 0.00 5.59 0.00 0.00 0.00 5.59 Botswana 0.00 78.32 0.00 1.28 0.00 79.61 Malawi ­53.16 ­6.77 ­0.35 0.00 0.00 ­60.28 Mozambique ­393.55 121.83 ­38.29 0.00 72.67 ­237.34 Namibia 0.00 0.08 0.00 0.00 0.00 0.08 Tanzania ­20.16 1.08 0.00 0.00 0.00 ­19.07 Zambia ­312.19 75.78 0.14 45.16 0.00 ­191.11 Zimbabwe ­118.95 250.87 0.14 ­13.85 0.00 118.21 Total ­898.01 526.78 ­38.36 32.59 72.67 ­304.33 Table 2.49. Estimated impact of climate change in the Zambezi River Basin by 2030 % change in 2030 Subregion Basin yield Irrigation deficit Upper Zambezi ­16 13 Kafue subbasin ­34 21 Lower Zambezi ­24 17 Shire River and Lake Malawi/Niassa/Nyasa ­14 15 Zambezi Delta ­13 27 Assumptions and definitions data assumption Source Parameter % change from historic data Climate Research Unit (CRU): 19610 - 90 Method Weighted average U.S. Geological Survey (USGS): class 4 catchment area Emission scenario A1B Global Circulation Model Midrange of 23 models Air temperature 1.5 degree Celcius (for evaporation estimates) Source: World Bank 2009. 60 The Development Scenarios seen in the average energy production which falls or in December (based on the work of Beilfuss and by 21 percent to from 55,857 to 44,189 GWh per year. Brown, 2006). These six different options for partial Details are provided in table 2.50. If Scenario 9 is restoration of natural floods can be achieved through compared with Scenario 2A, the reduction in firm modifying the operation of Lake Cahora Bassa. The and average energy is greater, 43 and 25 percent details of the scenarios are listed in figure 2.31. respectively. The supplementary requirements for Scenarios 10A to 10F are based on the system Scenario 9 are the same as for Scenario 8 (table 2.46.) of HPPs envisaged under SAPP, the existing irriga- tion projects, and abstractions for domestic water supply. They do not include IPs or HLI projects, or 2.17 scenarios10a­10F:parTial other projects. Note than scenario 10B is the same as scenario 2A. resToraTionoFnaTural Partial restoration of natural floods in the lower FloodsinlowerZaMbeZi Zambezi Delta is imperative for the viability of ecosystem processes, the sustainability of aquatic Objective: To assess the impact of partially restoring and marine life, sustaining livelihoods and ensuring natural floods in the lower Zambezi Delta for the economic development from its resources. The con- environmental and economic benefit of multiple struction of Kariba and Cahora Bassa dams altered sectors (i.e., fisheries, recession farming, livestock, the regime of the Zambezi River, drastically reduc- ecosystem sustainability etc.). ing the frequency and magnitude of floods as well as the River's ability to sustain a level of low flows. Features: Scenarios 10A to 10F are based on differ- ent levels of flooding in the lower Zambezi Delta Findings: Releasing water for partial restoration of and estimates the impact if these occur in February natural floods would impact the potential energy Table 2.50. Impact on energy production by potential climate change in 2030: Scenario 9 compared with Scenario 8 Energy production (GWh/year) % Change in energy Scenario 8 Scenario 9 production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,618 9,453 1,353 8,640 ­16 ­9 Kariba existing & extension 5,624 7,668 4,380 6,151 ­22 ­20 Itezhi Tezhi extension 258 712 206 540 ­20 ­24 Kafue Gorge Upper refurbishment 4,292 6,581 2,655 4,866 ­38 ­26 Kafue Gorge Lower projected 2,168 3,974 1,354 2,747 ­38 ­31 Cahora Bassa existing & extension 7,420 12,725 4,949 9,686 ­33 ­24 Mphanda Nkuwa projected 3,867 7,876 2,571 6,171 ­34 ­22 Rumakali projected 670 966 587 865 ­12 ­10 Songwe I projected 29 75 26 61 ­11 ­18 Songwe II projected 228 436 200 377 ­12 ­13 Songwe III projected 197 378 171 329 ­13 ­13 Lower Fufu projected 134 645 114 607 ­15 ­6 Kholombizo projected 318 1,603 48 1,009 ­85 ­37 Nkula Falls existing 440 1,010 160 780 ­64 ­23 Tedzani projected 281 714 103 528 ­63 ­26 Kapichira existing & extension 394 1,041 211 832 ­46 ­20 Total 30,013 55,857 20,270 44,189 ­32 ­21 61 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 2.29. Net present value by subbasin Figure 2.30. Net present value by country (US$ m): (US$ m): Scenario 9 compared with Scenario 2A Scenario 9 compared with Scenario 2A 400 400 200 200 0 0 ­200 US$ m ­400 ­200 US$ m ­600 ­400 ­800 ­600 ­1,000 Kabompo (13) Upper Zambezi (12) Lungúe Bungo (11) Luanginga (10) Barotse (9) Cuando/Chobe (8) Kafue (7) Kariba (6) Luangwa (5) Mupata (4) Malawi/Niassa/Nyasa (3) Tete (2) Zambezi Delta (1) Shire River ­ Lake ­800 ­1,000 Angola Botswana Malawi Mozambique Namibia Tanzania Zambia Zimbabwe Subbasin Country Agriculture Hydropower Other sectors Other projects Flood protection Agriculture Hydropower Other sectors Other projects Flood protection generation of Cahora Bassa Dam and the planned Reestablishing natural flooding to various Mphanda Nkuwa Dam. Estimated corresponding levels is technically feasible and creates substan- levels of impact are detailed in table 2.53. These are tial benefits to the Delta. The cost in hydropower also illustrated in figure 2.32. for firm energy produc- production losses are, however, higher at the pres- tion and figure 2.33. for average energy production. ent assumed prices. The results are very sensitive Table 2.51. Impact on energy production by potential climate change in 2030: Scenario 9 compared with Scenario 2A Energy production (GWh/year) % Change in energy Scenario 2A Scenario 9 production Hydropower plant Firm Average Firm Average Firm Average Batoka Gorge projected 1,908 9,637 1,353 8,640 ­29 ­10 Kariba existing & extension 6,368 8,360 4,380 6,151 ­31 ­26 Itezhi Tezhi extension 284 716 206 540 ­28 ­25 Kafue Gorge Upper refurbishment 4,542 6,766 2,655 4,866 ­42 ­28 Kafue Gorge Lower projected 2,301 4,092 1,354 2,747 ­41 ­33 Cahora Bassa existing & extension 9,680 14,204 4,949 9,686 ­49 ­32 Mphanda Nkuwa projected 5,026 8,477 2,571 6,171 ­49 ­27 Rumakali projected 686 985 587 865 ­14 ­12 Songwe I projected 42 91 26 61 ­37 ­33 Songwe II projected 276 490 200 377 ­28 ­23 Songwe III projected 228 414 171 329 ­25 ­20 Lower Fufu projected 134 645 114 607 ­15 ­6 Kholombizo projected 344 1,626 48 1,009 ­86 ­38 Nkula Falls existing 460 1,017 160 780 ­65 ­23 Tedzani projected 299 721 103 528 ­65 ­27 Kapichira existing & extension 541 1,063 211 832 ­61 ­22 Total 35,302 59,304 20,270 44,189 ­43 ­25 62 The Development Scenarios Table 2.52. Net present value by subbasin and country (US$ m): Scenario 9 compared with Scenario 2A Hydropower Agriculture Other sectors Other projects Flood protection Total change Subbasin Kabompo (13) 0.00 5.50 0.00 0.00 0.00 5.50 Upper Zambezi (12) 0.00 2.40 0.00 0.00 0.00 2.40 Lungúe Bungo (11) 0.00 0.00 0.00 0.00 0.00 0.00 Luanginga (10) 0.00 2.00 0.00 0.00 0.00 2.00 Barotse (9) 0.00 8.10 ­7.41 0.00 0.00 0.69 Cuando/Chobe (8) 0.00 0.10 0.00 0.00 0.00 0.10 Kafue (7) ­517.40 38.90 ­13.52 ­10.10 0.00 ­502.12 Kariba (6) ­529.20 227.20 0.77 42.70 0.00 ­258.53 Luangwa (5) 0.00 6.60 ­13.18 0.00 0.00 ­6.58 Mupata (4) 0.00 16.90 0.00 0.00 0.00 16.90 Shire River - Lake Malawi/ ­177.00 1.10 ­47.57 0.00 0.00 ­223.47 Niassa/Nyasa (3) Tete (2) ­771.70 52.70 ­10.08 0.00 0.00 ­729.08 Zambezi Delta (1) 0.00 88.50 ­37.50 0.00 72.70 123.70 Total ­1,995.30 450.00 ­128.49 32.60 72.70 ­1,568.49 Country Angola 0.00 4.30 0.00 0.00 0.00 4.30 Botswana 0.00 ­0.90 0.00 1.30 0.00 0.40 Malawi ­129.56 0.90 ­47.57 0.00 0.00 ­176.23 Mozambique ­771.70 121.80 ­47.58 0.00 72.70 ­624.78 Namibia 0.00 0.10 0.00 0.00 0.00 0.10 Tanzania ­47.50 0.20 0.00 0.00 0.00 ­47.30 Zambia ­781.97 72.70 ­33.72 45.20 0.00 ­697.79 Zimbabwe ­264.60 250.90 0.38 ­13.80 0.00 ­27.12 Total ­1,995.33 450.00 ­128.49 32.70 72.70 ­1,568.42 to changes in prices as a number of scenarios can For effects to be comparable in Scenario 10C, become positive at relatively small changes in price the price per KWh should be between $0.10 and assumptions. $0.20. This is not far from present prices, but quite far from the prices used in this analysis. In Scenario 10D a slight reduction of the firm energy price from Figure 2.31. Scenario 10A­10F: Flooding $0.58 to $0.50 would balance the NPVs. characteristics The results of scenarios 10A to 10F show that: Zambezi Delta Scenario flow (m3/s) Timing Duration · It is technically feasible to restore natural flood- 10A 4,500 February 4 weeks ing with a high percentage of success (from 100 percent for 4,500 m3 per second in February to 10B 7,000 February 4 weeks 90 percent for 7,000 m3 per second in December), 10C 10,000 February 4 weeks with the exception of the release of 10,000 m3 per 10D 4,500 December 4 weeks second in December (50 percent of occurrence). 10E 7,000 December 4 weeks · This will cause a reduction in generation at 10F 10,000 December 4 weeks Cahora Bassa and Mphanda Nkuwa HPPs, Source: Beilfuss and Brown, 2006. 63 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.53. Impact on energy production of Cahora Bassa Dam and the future Mphanda Nkuwa Dam: Scenario 2, Scenario 10A­F Scenario 2 10A 10B 10C 10D 10E 10F timing February December flood level -- 4,500 m3/s 7,000 m3/s 10,000 m3/s 4,500 m3/s 7,000 m3/s 10,000 m3/s Cahora Bassa Dam (existing) Firm energy (GWh/year) 11,826 11,432 9,680 7,577 10,862 9,373 7,972 Loss (GWh/year) -- 394 2,146 4,249 964 2,453 3,854 Loss (%) -- 3 18 36 8 21 33 Average energy (GWh/year) 15,024 15,062 14,204 12,771 14,961 14,135 13,059 Loss (GWh/year) -- ­38 820 2,253 64 889 1,965 Loss (%) -- 0 5 15 0 6 13 Mphanda Nkuwa Dam (planned) Firm energy (GWh/year) 6,190 5,970 5,026 3,916 5,654 4,859 4,096 Loss (GWh/year) -- 220 1,164 2,274 536 1,331 2,094 Loss (%) -- 4 19 37 9 22 34 Average energy (GWh/year) 9,092 9,059 8,476 7,705 8,949 8,479 7,977 Loss (GWh/year) -- 33 617 1,388 144 614 1,116 Loss (%) -- 0 7 15 2 7 12 Delta flood occurence (% time) -- 100 98 98 98 95 90 Figure 2.32. Impact on the energy production of Figure 2.33. Impact on the energy production of the Cahora Bassa HPP: Scenario 2, 10A­10F planned Mphanda Nkuwa HPP: Scenario 2, 10A­10F 16,000 10,000 14,000 9,000 8,000 12,000 7,000 10,000 6,000 GWh/year GWh/year 8,000 5,000 6,000 4,000 3,000 4,000 2,000 2,000 1,000 0 0 2 10A 10B 10C 10D 10E 10F 2 10A 10B 10C 10D 10E 10F Scenario Scenario Firm Energy Average Energy Firm Energy Average Energy between three percent and 33 percent for Ca- · The economic trade-offs between power and hora Bassa and four percent and 34 percent benefits do not favor flooding under the given for Mphanda Nkuwa (a firm energy reduction assumptions. The price of energy is critical in when compared with the base case). this regard. If one assumes the present bus bar 64 The Development Scenarios Table 2.54. Net present value by flooding level (US$ m): Scenarios 10A­10F compared with Scenario 2 Scenario Zambezi Delta flow (m3/s) Timing Duration Hydropower Other sectors 10A 4,500 February 4 weeks 245.66 47.35 10B 7,000 February 4 weeks ­874.95 61.93 10C 10,000 February 4 weeks ­1,848.36 49.65 10D 4,500 December 4 weeks ­331.2 53.49 10E 7,000 December 4 weeks ­988.35 67.26 10F 10,000 December 4 weeks ­1,657.12 58.28 prices ($0.02/KWh) the situation would be The subsequent scenarios (scenario 11B to 11G) in- reversed for most of the scenarios. troduce the six levels of natural floods as established in scenarios 10A to 10F (section 2.17.). The features Discharging 4,500m3 per second in February, as of Scenario 11A­11G are outlined in figure 2.34. presented in Scenario 10A, would meet the objective Scenarios 11A to 11G are based on the system at all times as presented in historical flow series. For of HPPs envisaged under SAPP, the existing irriga- the other scenarios, however, it would only be partly tion projects, and abstractions for domestic water met. The success of Scenario 10A would depend on supply. They do not include IPs or HLI projects, or the availability and effectiveness of hydrometric other projects. information network and system that especially Floods occur regularly in the Lower Zambezi covered the Lower Shire and Zambezi rivers as well downstream of Lupata Gorge in Mozambique, in as tributaries. the reaches of the Zambezi River both upstream and The restoration of natural floods means that the downstream of the confluence with the Shire River, as hydropower production will be affected either posi- well as on the Lower Shire itself. According to infor- tively (where flooding level signifies less restriction mation obtained from HidroEléctrica de Cahora Bassa on operations such as Scenario 10A) or negatively (HCB), flooding in these reaches start when the Zam- where the changed flooding level imposes more bezi River discharge exceeds 10,000 m3 per second. restrictions on operation. The corresponding impact In the historical period of the model, the Zam- on NPV is presented in table 2.54. bezi River monthly discharge downstream of the Lupata Gorge exceed the threshold of 10,000 m3 per second between December and mid-March 2.18 scenarios11a­11g:Flood in any ten separate years, causing potential flood proTecTioninlowerZaMbeZi Figure 2.34. Scenario 11A­11G: flood protection Objective: To assess the impact of both restoring characteristics different levels of natural floods (Scenario 10A­ 10F) and flood protection to a maximum of 10,000 Zambezi Flood protection Delta flow m3 per second downstream of Lupata Gorge in the Scenario ­maximum m3/s (m3/s) Timing Duration Lower Zambezi. 11A 10,000 -- -- -- Features: Scenarios 11A to 11G introduces flood 11B 10,000 4,500 February 4 weeks protection to a maximum of 10,000 m3 per second 11C 10,000 7,000 February 4 weeks downstream of Lupata Gorge in the Lower Zambezi 11D 10,000 10,000 February 4 weeks (see map in figure 1.1.). This level of flood protection 11E 10,000 4,500 December 4 weeks is firstly introduced to a situation where no releases 11F 10,000 7,000 December 4 weeks are made for restoring natural floods (Scenario 11A). 11G 10,000 10,000 December 4 weeks 65 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis related disasters. In order to limit the discharge Findings: Scenarios 11A to 11G demonstrate that it to 10,000 m3 per second, the Cahora Bassa flood is theoretically possible to operate Cahora Bassa res- rule curve is modified to provide supplementary ervoir to both reduce floods in the Zambezi Flood- storage equal to the volume required to meet the plain near Lupata Gorge and to restore flooding in maximum permissible flow criterion downstream. the Lower Delta--two apparently contradictory Modifying the flood rule curve of Cahora Bassa in objectives. But as shown in table 2.55., the objective the months of October to February provides the of restoring natural flooding cannot be met at all desired results for all months, except January and times. In particular, Scenario 11G shows that flood March 1978. Whereas in the original time series, restoration in the Lower Delta is effective only in only 75 percent of the years do not experience 50 percent of the years modeled. Yet, out of the 20 flooding, with the rule curve developed at Cahora years where the 10,000 m3 per second cannot be Bassa to limit downstream flooding, 98 percent of met, in 11 years the flood restoration level is above the years do not experience downstream flooding. It 9,000 m3 per second, while in the other nine years is, however, important to note that it would be next it varies from 3,600 to 8,000 m3 per second. to impossible to manage the Cahora Bassa reservoir The impact on energy production by flood to counter all flooding situations. In conclusion, protection outlined in Scenarios 11A and 11B is managing the Cahora Bassa reservoir to protect detailed in table 2.55. Contrary to scenarios 10A the Lupata Floodplain against flooding does not to 10F, production rates are higher. Reestablishing promise to be consistently effective. natural flooding and flood protection is technically It should also be noted that if, theoretically, feasible and creates substantial benefits. But, in modified operation of Cahora Bassa reservoir could economic terms and under the given assumptions, mitigate most flooding at the monthly level, the a introduction of flood protection has a substantial sizeable portion of floods originate from flash floods cost in losses of hydropower production over and in major and minor tributaries. In the absence of a above the avoided costs. comprehensive early warning system, the capa- The NPV reduction of hydropower produc- bility to mitigate is limited and the level of flood tion outweighs the calculated effects from other protection achieved in the simulation would not be sectors and the value of adding flood protection achieved in practice. to scenarios 10A to 10F. Reducing the firm energy Figure 2.35. Impact on the energy production of Figure 2.36. Impact on the energy production of the Cahora Bassa HPP: Scenario 11A­11G compared planned Mphanda Nkuwa HPP: Scenario 11A­11G with Scenario 10A­10F compared with Scenario 10A­10F 16,000 10,000 14,000 9,000 8,000 12,000 7,000 10,000 6,000 GWh/year GWh/year 8,000 5,000 6,000 4,000 3,000 4,000 2,000 2,000 1,000 0 0 11A 10A 11B 10B 11C 10C 11D 10D 11E 10E 11F 10F 11G 11A 10A 11B 10B 11C 10C 11D 10D 11E 10E 11F 10F 11G Scenario Scenario Firm Energy Average Energy Firm Energy Average Energy 66 Table 2.55. Impact on energy production of Cahora Bassa Dam and the future Mphanda Nkuwa Dam: Scenario 2, Scenario 10A­10F, 11A­11G Scenario 2 11A 10A 11B 10B 11C 10C 11D 10D 11E 10E 11F 10F 11G timing -- February December flood protection, max (m3/s) -- 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 3 flood level (m /s) -- -- 4,500 4,500 7,000 7,000 10,000 10,000 4,500 4,500 7,000 7,000 10,000 10,000 Cahora Bassa Dam (existing) Firm energy (GWh/year) 11,826 10,626 11,432 10,048 9,680 8,480 7,577 7,052 10,862 9,531 9,373 7,972 7,972 7,428 Loss (GWh/year) 1,200 394 1,778 2,146 3,346 4,249 4,774 964 2,295 2,453 3,854 3,854 4,398 Loss (%) 10 3 15 18 28 36 40 8 19 21 33 33 37 Average energy (GWh/year) 15,024 14,204 15,062 14,247 14,204 13,529 12,771 12,299 14,961 14,175 14,135 13,083 13,059 11,948 Loss (GWh/year) 821 ­38 777 820 1,495 2,253 2,725 64 849 889 1,941 1,965 3,077 Loss (%) 5 0 5 5 10 15 18 0 6 6 13 13 20 67 Mphanda Nkuwa Dam (planned) Firm energy (GWh/year) 6,190 5,544 5,970 5,227 5,026 4,430 3,916 3,694 5,654 4,976 4,859 4,152 4,096 3,880 Loss (GWh/year) 646 220 963 1,164 1,760 2,274 2,496 536 1,214 1,331 2,038 2,094 2,310 Loss (%) 10 4 16 19 28 37 40 9 20 22 33 34 37 Average energy (GWh/year) 9,092 8,963 9,059 8,954 8,476 8,340 7,705 7,697 8,949 8,919 8,479 8,240 7,977 7,799 Loss (GWh/year) 130 33 139 617 752 1,388 1,396 144 173 614 853 1,116 1,294 Loss (%) 1 0 2 7 8 15 15 2 2 7 9 12 14 Delta flood occurence 93 100 100 98 98 98 93 98 95 95 90 90 50 (% time) Flood protection 93 93 93 95 95 95 95 occurance (% time) The Development Scenarios The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Table 2.56. Net present value of flood protection levels (US$ m): Scenarios 11A­11G compared with Scenario 2A and 10A­10F Compared Zambezi with Flood protection Delta flow Other Flood Scenario Scenario ­maximum m3/s (m3/s) Timing Duration Hydropower sectors protection Total 11A 2A 10,000 -- -- -- 482 ­94 73 461 11B 10A 10,000 4,500 February 4 weeks ­593 2 73 ­518 11C 10B 10,000 7,000 February 4 weeks ­506 65 73 ­368 11D 10C 10,000 10,000 February 4 weeks ­238 65 73 ­101 11E 10D 10,000 4,500 December 4 weeks ­576 65 73 ­439 11F 10E 10,000 7,000 December 4 weeks ­637 65 73 ­500 11G 10F 10,000 10,000 December 4 weeks ­348 65 73 ­211 price in Scenario 11D to $0.03/KWh would balance 10 to 40 percent for firm energy and one to 37 the NPVs. percent for average energy. The economic value of flood protection is based on the avoided economic costs from disasters. The losses are calculated on housing, infrastructure, and 2.19inFlowsensiTiviTy agriculture assets. The NPV of the projected avoided analysis costs is $72 million. This could be at the assumed price of firm energy of $0.58, which offsets a loss of A sensitivity analysis was undertaken to assess the 130 GWh in firm energy and is much less than in implications of inaccuracies and variability in the the scenarios envisaged. inflows to the reservoir operation model. Variabil- The results of scenarios 11A to 11G that: ity in the range of plus and minus ten percent was considered in the results of Scenario 8, the balanced · Partial restoration of natural flooding of 4,500 multi-sector development scenario. m3 per second or 7,000 m3 per second in Febru- The impact of variability in inflow on firm ary and December and flood protection down- and average energy productivity of Scenario 8 is stream of the Lupata Gorge can be combined; detailed in table 2.57. With a ten percent reduction · Partially restoring natural flooding with 10,000 in inflows, firm energy decreases by 17 percent and m3 per second in February has a high percent- average energy by eight percent. With a ten percent age of success except during December (50 increase in inflows, the increases are 12 and eight percent); and percent respectively. · Compared with the base scenario, energy pro- duction is significantly reduced with between 68 The Development Scenarios Table 2.57. Sensitivity analysis on energy production: Scenario 8 Energy production (GWh/year) % Change in energy production 10% reduced 10% increased Firm energy Average energy inflows inflows 10% 10% 10% 10% reduced Scenario increased reduced Scenario increased Hydropower plant inflows 8 inflow inflows 8 inflow Firm Average Firm Average Batoka projected 1,444 1,618 1,790 8,975 9,453 9,881 ­11 ­5 11 5 Gorge Kariba existing & 4,949 5,624 6,325 6,825 7,668 8,505 ­12 ­11 12 11 extension Itezhi Tezhi extension 80 258 316 673 712 747 ­69 ­6 23 5 Kafue Gorge refurbish- 3,376 4,292 4,468 6,153 6,581 6,899 ­21 ­6 4 5 Upper ment Kafue Gorge projected 1,708 2,168 2,257 3,661 3,974 4,234 ­21 ­8 4 7 Lower Cahora existing & 6,106 7,420 8,453 11,381 12,725 13,972 ­18 ­11 14 10 Bassa extension Mphanda projected 3,165 3,867 4,391 7,051 7,876 8,695 ­18 ­10 14 10 Nkuwa Rumakali projected 118 670 718 909 966 1,027 ­82 ­6 7 6 Songwe I projected 27 29 36 66 75 84 ­7 ­12 22 12 Songwe II projected 206 228 266 395 436 485 ­10 ­9 17 11 Songwe III projected 177 197 225 344 378 417 ­10 ­9 14 10 Lower Fufu projected 122 134 147 618 645 668 ­9 ­4 9 4 Kholombizo projected 208 318 417 1,453 1,603 1,721 ­34 ­9 31 7 Nkula Falls existing 307 440 528 961 1,010 1,038 ­30 ­5 20 3 Tedzani projected 195 281 338 670 714 738 ­31 ­6 20 4 Kapichira existing & 314 394 495 983 1,041 1,071 ­20 ­6 26 3 extension Total 25,020 30,013 33,519 51,120 55,857 60,182 ­17 ­8 12 8 69 3 Summary of Findings In table 3.1. a summary of the scenario results in each sector is pro- vided. The subsequent sections of this chapter look at water-using activities individually to illustrate relative impact and summary of results. 3.1 energyproducTion The estimated levels of firm and average energy production from Scenario 0 to Scenario 8 are presented in figure 3.1. and figure 3.2. respectively. The result shows that the generation of firm energy ranges from 43,476 GWh per year in Scenario 2D to 11,600 GWh per year in Scenario 4. For average energy, the equivalent range is from 60,760 GWh per year in Scenario 2 to 21, 907 GWh per year in Scenario 4. In the figures, the lighter shaded data labels indicate the existing system of HPPs, and the darker indicate the potential HPPs envisaged under SAPP. 3.2 irrigaTion The model evaluates three different levels of irrigation in the ZRB. Firstly, the existing areas that are equipped and the total average annually irrigated area. Secondly, estimates were made for how these two categories of irrigation areas would increase with the development and implementation of identified irrigation projects (IPs). Lastly, the model also considered the potential of a much higher level of irrigation (HLI) on two previous levels of irrigation. In addition to estimating the potential of these two latter categories of expansion (IPs and HLI), the model evaluated what would happen if there was coordination in the basin, by moving upstream irrigated areas to downstream location (see Scenario 5A and Scenario 6A). The expansion of irrigated area (both total average and equipped area) is detailed in table 3.2. The results indicate that the increase is concentrated to the middle and lower parts of the ZRB: in the Kafue subbasin with no potential for significant increase in irrigated area; in the Kariba subbasin where Zimbabwe plans a major initiative to 71 Table 3.1. Summary of findings: Scenario 0 ­ Scenario 8 Scenario 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 Hydropower Current Current SAPP SAPP SAPP SAPP SAPP Current Current SAPP SAPP SAPP SAPP SAPP SAPP Situation - No Situation - No Development - Development - Development - Development - Development Situation - no Situation - no Development Development Development Development Development Development coordinated coordinated no coordinated no coordinated 4 clusters 2 clusters - 1 system coordinated coordinated - no - no - no - no - no - no operation operation operation operation operation operation coordinated coordinated coordinated coordinated coordinated coordinated operation operation operation operation operation operation Irrigation Current Current Current Current Current Current Current IPs - no HLI - no IPs - no IPs - HLI - no HLI - IPs - no IPs - no Situation Situation Situation Situation Situation Situation Situation coordination coordination coordination coordinated coordination coordinated coordination coordination Restoration of natural flooding No artificial No artificial No artificial AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 AF2 (7,000 in Delta flooding flooding flooding m3/s in m3/s in m3/s in m3/s in m3/s in m3/s in m3/s in m3/s in m3/s in m3/s in m3/s in m3/s in February) February) February) February) February) February) February) February) February) February) February) February) Flood protection FP (max n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 10,000 m3/s at Lupata) E-Flows n/a n/a n/a e-flows e-flows e-flows e-flows e-flows e-flows e-flows e-flows e-flows e-flows e-flows e-flows Other projects Other Other n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a No n/a n/a Projects Projects Domestic water supply domestic water domestic water domestic water domestic water domestic water domestic water domestic domestic domestic domestic domestic domestic domestic domestic domestic The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis supply supply supply supply supply supply water supply water supply water supply water supply water supply water supply water supply water supply water supply 72 HYDROPOWER Firm energy production - change G Batoka projected -- 1,907 1,907 -- -- 1,660 1,696 1,099 1,125 1,618 1,618 Gorge 13,315 Kariba existing & exten- 6,369 6,333 6,369 5,694 3,171 5,694 5,825 3,171 3,311 5,624 5,624 sion Itezhi Tezhi extension -- 284 284 19,570 -- -- 258 258 208 208 258 258 Kafue Gorge refurbishment 4,695 4,687 4,542 4,424 3,819 4,424 4,459 3,811 4,030 4,292 4,292 Upper 7,446 Kafue Gorge projected -- 24,397 2,368 2,301 43,476 -- 2,239 2,252 1,924 2,035 2,168 2,168 Lower Cahora existing & exten- 11,922 11,826 9,680 8,804 4,949 8,804 8,970 4,967 5,151 8,585 7,420 Bassa sion 15,006 Mphanda projected -- 6,190 5,026 -- -- 4,554 4,643 2,511 2,608 4,457 3,867 Nkuwa 19,894 Rumakali projected -- 686 686 -- -- 670 670 670 670 670 670 Songwe I projected -- 41 41 3,092 -- -- 29 29 32 32 29 29 Songwe II projected -- 277 277 -- -- 228 228 237 237 228 228 Continued on next page Table 3.1. Summary of findings: Scenario 0 ­ Scenario 8 (continued) Scenario 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 Songwe III projected -- 229 229 -- -- 197 197 201 203 197 197 Lower Fufu projected -- 134 134 -- -- 134 134 134 134 134 134 Kholombizo projected -- 344 344 -- -- 318 318 152 152 318 318 Nkula Falls existing 462 24,397 460 460 3,092 19,894 43,476 442 272 440 440 271 271 440 440 Tedzani projected 300 299 299 282 173 281 281 172 172 281 281 Kapichira existing & exten- 542 541 541 395 102 394 394 103 103 394 394 sion Total 22,776 24,397 39,000 35,302 39,928 37,712 43,476 18,052 11,600 32,358 33,107 22,282 22,917 32,024 30,013 Change in firm energy production (GWh/year) Compared with Scenario: 0 0 0 2A 2B 2C 0 0 2A 5 2A 6 2A 2A Batoka projected 1,907 1,907 ­ ­ ­247 37 ­808 26 ­290 ­290 Gorge 5,499 Kariba existing & exten- ­35 0 ­675 ­3,197 ­675 131 ­3,197 140 ­745 ­745 sion Itezhi Tezhi extension 284 284 613 ­ ­ ­26 0 ­76 0 ­26 ­26 Kafue Gorge refurbishment 73 ­9 ­153 ­271 ­876 ­118 34 ­731 219 ­250 ­250 Upper 358 Kafue Gorge projected 2,368 2,301 ­ ­ ­62 13 ­377 111 ­133 ­133 Lower Cahora existing & exten- ­96 ­2,243 ­3,119 ­6,973 ­876 166 ­4,713 184 ­1,095 ­2,260 Bassa sion 321 Mphanda projected n/a 1,621 6,190 5,026 5,764 ­ ­ ­473 90 ­2,515 96 ­569 ­1,159 Nkuwa Rumakali projected 686 686 ­ ­ ­16 0 ­16 0 ­16 ­16 Songwe I projected 41 41 ­ ­ ­12 0 ­10 0 ­12 ­12 Songwe II projected 277 277 ­ ­ ­49 0 ­40 0 ­49 ­49 981 Songwe III projected 229 229 ­ ­ ­32 0 ­27 2 ­32 ­32 Lower Fufu projected 134 134 ­ ­ 0 0 0 0 0 0 1 Kholombizo projected 344 344 ­ ­ ­26 0 ­192 0 ­26 ­26 Nkula Falls existing ­2 ­2 ­20 ­191 ­20 0 ­189 0 ­20 ­20 Tedzani projected ­18 ­127 ­18 0 ­126 0 ­18 ­18 Kapichira existing & exten- ­147 ­441 ­147 0 ­439 0 ­147 ­147 sion Total 1,621 16,224 12,526 4,626 ­2,216 5,764 ­4,724 ­11,176 ­2,944 749 ­13,020 635 ­3,279 ­5,290 Summary of Findings Continued on next page Table 3.1. Summary of findings: Scenario 0 ­ Scenario 8 (continued) Scenario 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 % change n/a 7% 42% 35% 12% ­6% 13% ­26% ­96% ­9% 2% ­58% 3% ­10% ­18% Average energy production (GWh/year) Batoka projected 0 0 9,638 9,638 0 0 9,479 9,495 9,123 9,140 9,453 9,453 Gorge 17,819 Kariba existing & exten- 7,668 7697 8,358 8,361 7,059 4,701 7,709 7,850 5,255 5,396 7,668 7,668 sion Itezhi Tezhi extension 0 0 716 716 30,094 0 0 712 712 705 705 712 712 Kafue Gorge refurbishment 6,785 7359 6,784 6,766 6,677 6,460 6,677 6,714 6,460 6,518 6,581 6,581 Upper 11,583 Kafue Gorge projected 0 0 4,097 4,092 0 0 4,036 4,061 3,913 3,944 3,974 3,974 Lower Cahora existing & exten- 59,178 13,535 13028 15,024 14,204 11,609 8,622 13,449 13,613 10,361 10,535 13,344 12,725 Bassa sion 22,691 Mphanda projected 0 0 9,093 8,476 0 0 8,063 8,154 6,347 6,440 7,996 7,876 Nkuwa Rumakali projected 0 0 985 985 0 0 966 966 966 966 966 966 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis 29,157 74 Songwe I projected 0 0 90 91 0 0 75 75 75 75 75 75 Songwe II projected 0 0 490 490 7,045 0 0 436 436 439 439 436 436 Songwe III projected 0 0 414 414 0 0 378 378 381 381 378 378 Lower Fufu projected 0 0 645 645 0 0 645 645 645 645 645 645 Kholombizo projected 0 0 1,626 1,626 0 0 1,603 1,603 1,371 1,371 1,603 1,603 Nkula Falls existing 1,017 989 1,017 1,017 1,011 936 1,010 1,010 935 935 1,010 1,010 Tedzani projected 722 692 720 720 716 651 714 715 648 650 714 714 Kapichira existing & exten- 560 558 1,063 1,063 557 537 1,041 1,041 880 880 1,041 1,041 sion Total 30,287 30,232 60,760 59,304 59,138 59,251 59,178 27,629 21,907 56,993 57,468 48,504 49,020 56,596 55,857 Change in average energy production (GWh/year) Compared with Scenario: 0 0 0 2A 2B 2C 0 0 2A 5 2A 6 2A 2A Batoka projected 0 9,638 9,638 0 0 ­159 16 ­515 17 ­185 ­185 Gorge ­179 Kariba existing & exten- 29 690 693 ­609 ­2967 ­652 141 ­3,106 141 ­693 ­693 sion n/a 692 ­73 Itezhi Tezhi extension 0 716 716 0 0 ­4 0 ­11 0 ­4 ­4 Kafue Gorge refurbishment 8 574 ­19 ­108 ­325 ­89 37 ­306 58 ­185 ­185 Upper Continued on next page Table 3.1. Summary of findings: Scenario 0 ­ Scenario 8 (continued) Scenario 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 Kafue Gorge projected 0 4,097 4,092 8 692 0 0 ­56 25 ­179 31 ­118 ­118 Lower Cahora existing & exten- ­507 1,489 669 ­1926 ­4913 ­755 164 ­3,843 174 ­860 ­1,479 Bassa sion 12 Mphanda projected 0 9,093 8,476 0 0 ­413 91 ­2,129 93 ­480 ­600 Nkuwa Rumakali projected 0 985 985 0 0 ­19 0 ­19 0 ­19 ­19 Songwe I projected 0 90 91 0 0 ­16 0 ­16 0 ­16 ­16 Songwe II projected n/a 0 490 490 ­73 0 0 ­54 0 ­51 0 ­54 ­54 ­579 Songwe III projected 0 414 414 0 0 ­36 0 ­33 0 ­36 ­36 Lower Fufu projected 0 645 645 0 0 0 0 0 0 0 0 483 Kholombizo projected 0 1,626 1,626 0 0 ­23 0 ­255 0 ­23 ­23 Nkula Falls existing ­28 0 0 ­6 ­81 ­7 0 ­82 0 ­7 ­7 Tedzani projected ­30 ­2 ­2 ­6 ­71 ­6 1 ­72 2 ­6 ­6 Kapichira existing & exten- ­2 503 503 ­3 ­23 ­22 0 ­183 0 ­22 ­22 sion 75 Total n/a 36 30473 29,017 324 113 ­73 ­2658 ­8380 ­2311 475 ­10800 516 ­2708 ­3447 % change n/a 0% 50% 49% 1% 0% 0% ­10% ­38% ­4% 1% ­22% 1% ­5% ­6% IRRIGATION Total equipped area (ha) Angola 4,750 4,750 4,750 4,750 4,750 4,750 4,750 15,250 45,250 15,250 15,250 45,250 45,250 15,250 15,250 Botswana 0 0 0 0 0 0 0 13,800 27,600 13,800 13,800 27,600 27,600 13,800 13,800 Malawi 30,816 30,816 30,816 30,816 30,816 30,816 30,816 78,727 378,727 78,727 78,727 378,727 378,727 78,727 78,727 Mozambique 7,413 7,413 7,413 7,413 7,413 7,413 7,413 103,618 403,618 103,618 103,618 403,618 403,618 103,618 103,618 Namibia 120 120 120 120 120 120 120 420 15,420 420 420 15,420 15,420 420 420 Tanzania 11,600 11,600 11,600 11,600 11,600 11,600 11,600 23,200 73,200 23,200 23,200 73,200 73,200 23,200 23,200 Zambia 56,452 56,452 56,452 56,452 56,452 56,452 56,452 93,874 383,874 93,874 93,874 383,874 383,874 93,874 93,874 Zimbabwe 71,486 71,486 71,486 71,486 71,486 71,486 71,486 189,950 399,950 189,950 189,950 399,950 399,950 189,950 189,950 Total 182,637 182,637 182,637 182,637 182,637 182,637 182,637 518,839 1,727,639 518,839 518,839 1,727,639 1,727,639 518,839 518,839 Change in equipped area (ha) Angola 0 0 0 0 0 0 10,500 40,500 10,500 10,500 40,500 40,500 10,500 10,500 Botswana n/a 0 0 0 0 0 0 13,800 27,600 13,800 13,800 27,600 27,600 13,800 13,800 Malawi 0 0 0 0 0 0 47,911 347,911 47,911 47,911 347,911 347,911 47,911 47,911 Summary of Findings Continued on next page Table 3.1. Summary of findings: Scenario 0 ­ Scenario 8 (continued) Scenario 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 Mozambique 0 0 0 0 0 0 96,205 396,205 96,205 96,205 396,205 396,205 96,205 96,205 Namibia 0 0 0 0 0 0 300 15,300 300 300 15,300 15,300 300 300 Tanzania 0 0 0 0 0 0 11,600 61,600 11,600 11,600 61,600 61,600 11,600 11,600 n/a Zambia 0 0 0 0 0 0 37,422 327,422 37,422 37,422 327,422 327,422 37,422 37,422 Zimbabwe 0 0 0 0 0 0 118,464 328,464 118,464 118,464 328,464 328,464 118,464 118,464 Total 0 0 0 0 0 0 336,202 1,545,002 336,202 336,202 1,545,002 1,545,002 336,202 336,202 % change 0% 0% 0% 0% 0% 0% 65% 89% 65% 65% 89% 89% 65% 65% Total average irrigated area (ha) Angola 6,125 6,125 6,125 6,125 6,125 6,125 6,125 16,750 54,250 16,750 16,750 54,250 54,250 16,750 16,750 Botswana 0 0 0 0 0 0 0 20,300 40,600 20,300 20,300 40,600 40,600 20,300 20,300 Malawi 37,820 37,820 37,820 37,820 37,820 37,820 37,820 115,846 620,734 115,846 115,846 620,734 620,734 115,846 115,846 Mozambique 8,436 8,436 8,436 8,436 8,436 8,436 8,436 145,846 670,846 145,846 145,846 670,846 670,846 145,846 145,846 Namibia 140 140 140 140 140 140 140 590 18,590 590 590 18,590 18,590 590 590 Tanzania 23,140 23,140 23,140 23,140 23,140 23,140 23,140 46,280 146,021 46,280 46,280 146,021 146,021 46,280 46,280 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Zambia 74,661 74,661 74,661 74,661 74,661 74,661 74,661 135,920 627,444 135,920 135,920 627,444 627,444 135,920 135,920 76 Zimbabwe 108,717 108,717 108,717 108,717 108,717 108,717 108,717 292,148 617,314 292,148 292,148 617,314 617,314 292,148 292,148 Total 259,039 259,039 259,039 259,039 259,039 259,039 259,039 773,680 2,795,799 773,680 773,680 2,795,799 2,795,799 773,680 773,680 Change in total average irrigated area (ha) Angola 0 0 0 0 0 0 10,625 48,125 10,625 10,625 48,125 48,125 10,625 10,625 Botswana 0 0 0 0 0 0 20,300 40,600 20,300 20,300 40,600 40,600 20,300 20,300 Malawi 0 0 0 0 0 0 78,026 582,914 78,026 78,026 582,914 582,914 78,026 78,026 Mozambique 0 0 0 0 0 0 137,410 662,410 137,410 137,410 662,410 662,410 137,410 137,410 n/a Namibia 0 0 0 0 0 0 450 18,450 450 450 18,450 18,450 450 450 Tanzania 0 0 0 0 0 0 23,140 122,881 23,140 23,140 122,881 122,881 23,140 23,140 Zambia 0 0 0 0 0 0 61,259 552,783 61,259 61,259 552,783 552,783 61,259 61,259 Zimbabwe 0 0 0 0 0 0 183,431 508,597 183,431 183,431 508,597 508,597 183,431 183,431 Total 0 0 0 0 0 0 514,641 2,536,760 514,641 514,641 2,536,760 2,536,760 514,641 514,641 % change 0% 0% 0% 0% 0% 0% 67% 91% 67% 67% 91% 91% 67% 67% OTHER ABSTRACTIONS AND SUPPLEMENTARY REGULATION Additional regulation requirements compared with Scenario 0 million m3 n/a n/a n/a n/a n/a n/a n/a 254 3,078 254 219 3,328 3,248 254 254 Continued on next page Table 3.1. Summary of findings: Scenario 0 ­ Scenario 8 (continued) Scenario 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 Irrigation million m3 3,234 3,234 3,234 3,234 3,234 3,234 3,234 9,119 29,326 9,119 8,840 29,326 29,047 9,119 9,119 % run-off 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 7.0% 22.6% 7.0% 6.8% 22.6% 22.4% 7.0% 7.0% Mining and water supply million m3 344 344 344 344 344 344 344 344 344 344 344 344 344 786 786 % run-off 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.6% 0.6% Evaporation million m3 9,054 8,963 9,357 9,262 9,240 9,048 9,007 8,985 9,070 9,237 9,250 9,338 9,328 9,237 8,953 % run-off 7.0% 6.9% 7.2% 7.1% 7.1% 7.0% 6.9% 6.9% 7.0% 7.1% 7.1% 7.2% 7.2% 7.1% 6.9% 77 Summary of Findings The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 3.1. Firm energy production: Figure 3.2. Average energy production: Scenario 0­Scenario 8 Scenario 0 ­ Scenario 8 50,000 70,000 45,000 60,000 GWh/year 40,000 50,000 35,000 40,000 30,000 30,000 GWh/year 25,000 20,000 20,000 10,000 15,000 0 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 10,000 Scenario 5,000 0 0 1 2 2A 2B 2C 2D 3 4 5 5A 6 6A 7 8 Scenario 72 percent of total water abstractions (figure 3.3.). In the modeled scenarios, evaporation rates vary from 23 percent to 50 percent depending on levels develop agriculture; and the Tete, the Shire River of water withdrawal for other uses. and Lake Malawi/Niassa/Nyasa, and the Zambezi In the Base Case (Scenario 0), irrigation ab- Delta subbasins. stractions are comparable to 2.5 percent of annual run-off and 26 percent of total abstractions. When the identified irrigation projects are introduced, 3.3 oTherabsTracTionsand abstraction doubles to approximately 50 percent of suppleMenTaryregulaTion the total abstractions, and triples in the high-level irrigation scenarios. Evaporation from reservoirs in the ZRB equates to When multi-sector development is considered approximately seven percent of the total annual run- in Scenario 7 and Scenario 8, water withdrawals off (130,000 million m3 per year) and approximately equate to approximately 15 percent of the annual Figure 3.3. Water abstractions (million m3/year): Scenario 0, Scenario 3 to 8 45,000 40,000 35,000 30,000 million m3/year 25,000 20,000 15,000 10,000 5,000 0 Scenario 0 Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6 Scenario 7 Scenario 8 Mining and water supply 344 344 344 344 344 344 344 786 786 Irrigation 3,234 9,119 29,326 9,119 8,840 29,326 29,047 9,119 9,119 Evaporation 9,054 8,985 9,070 9,237 9,250 9,338 9,328 9,237 8,953 78 Table 3.2. Total average irrigated area and total equipped area (ha/year): Scenario 0­8 Average annual irrigated area (ha) Equipped irrigation area (ha) Scenario 0, 2 Scenario 3, 5, Scenario 0, 2 Scenario 3, 5, & 2A­2D 7&8 Scenario 5A Scenario 4 & 6 Scenario 6A & 2A­2D 7&8 Scenario 5A Scenario 4 & 6 Scenario 6A Current IPs without IPs with HLI without HLI with Current IPs without IPs with HLI without HLI with situation cooperation cooperation cooperation cooperation situation cooperation cooperation cooperation cooperation Subbasins Kabompo (13) 595 11,314 11,314 28,328 28,328 350 6,650 6,650 16,650 16,650 Upper Zambezi (12) 3,250 8,250 4,750 20,750 17,250 2,500 7,500 4,000 17,500 14,000 Lungúe Bungo (11) 1,250 1,875 1,875 14,375 14,375 1,000 1,500 1,500 11,500 11,500 Luanginga (10) 1,000 6,000 6,000 18,500 18,500 750 5,750 5,750 15,750 15,750 Barotse (9) 340 12,753 12,753 30,466 30,466 200 7,208 7,208 17,208 17,208 Cuando/Chobe (8) 765 1,215 1,215 19,215 19,215 620 920 920 15,920 15,920 Kafue (7) 46,528 67,048 62,449 104,448 99,849 40,158 53,768 49,169 78,768 74,169 Kariba (6) 44,531 228,919 208,969 948,825 928,875 28,186 147,778 127,828 591,578 571,628 Luangwa (5) 17,794 28,857 28,857 73,814 73,814 10,100 16,230 16,230 41,230 41,230 79 Mupata (4) 21,790 30,356 30,356 30,356 30,356 14,200 20,060 20,060 20,060 20,060 Shire River - Lake 60,960 162,126 162,126 766,755 766,755 42,416 101,927 101,927 451,927 451,927 Malawi/Niassa/Nyasa (3) Tete (2) 52,572 108,193 108,193 508,193 508,193 35,159 65,495 65,495 265,495 265,495 Zambezi Delta (1) 7,664 106,774 134,823 231,774 259,823 6,998 84,053 112,102 184,053 212,102 Total 259,039 773,680 773,680 2,795,799 2,795,799 182,637 518,839 518,839 1,727,639 1,727,639 Countries Angola 6,125 16,750 13,250 54,250 50,750 4,750 15,250 11,750 45,250 41,750 Botswana 0 20,300 20,300 40,600 40,600 0 13,800 13,800 27,600 27,600 Malawi 37,820 115,846 115,846 620,734 620,734 30,816 78,727 78,727 378,727 378,727 Mozambique 8,436 145,846 173,895 670,846 698,895 7,413 103,618 131,667 403,618 431,667 Namibia 140 590 590 18,590 18,590 120 420 420 15,420 15,420 Tanzania 23,140 46,280 46,280 146,021 146,021 11,600 23,200 23,200 73,200 73,200 Zambia 74,661 135,920 131,321 627,444 622,845 56,452 93,874 89,275 383,874 379,275 Zimbabwe 108,717 292,148 272,198 617,314 597,364 71,486 189,950 170,000 399,950 380,000 Summary of Findings Total 259,039 773,680 773,680 2,795,799 2,795,799 182,637 518,839 518,839 1,727,639 1,727,639 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis run-off. In the high-level irrigation scenarios, how- ever, withdrawals increase to 30 percent of the an- Table 3.3. Supplementary regulation nual run-off (table 3.3.). requirements: Scenario 0, Scenario 3 to Scenario 8 Supplementary regulation compared with base case 3.4 econoMicassessMenT Scenario (million m3) Scenario 0 0 The simulated scenarios primarily explore how Scenario 3 254 hydropower and irrigation sectors can be opti- Scenario 4 3,078 mized and with what economic benefits (i.e., total Scenario 5 254 and change in NPV). The overall time-frame con- Scenario 5A 219 sidered for the simulations is 50 years with a 30 Scenario 6 3,328 year assumed lifetime for the individual projects Scenario 6A 3,248 incorporating discounted costs and gains. This is especially important for the constructions of HPPs Scenario 7 254 where initial costs are usually very high and long Scenario 8 254 term benefits are gained over time. The scenarios include estimated total, or change Investment in upgrades, extensions and new infra- in NPV of hydropower, agriculture, other sectors, structure for hydropower could thus be financially other projects, and flood protection. The economic viable. Interestingly, the scenarios clearly show model is restricted as it does not assess how eco- that economic benefits can already be achieved nomic gains and increased productivity will have through cooperation and conjunctive operation of a multiplying effect on the economies and societies the existing HPPs (whilst also taking environmen- of the riparian countries. In addition, other water tal concerns and other water-using sectors into using activities are difficult to accurately estimate in consideration). economic terms despite being fundamental for rural Figure 3.4. gives an overview of the economic livelihoods, wildlife, ecosystem services to mention assessment. The potential employment impact is a few. Hence, any analysis of the implied trade-off presented in the right hand y-axis, whereas the left between NPV estimates for different sectors in each hand y-axis presents total net present value (US$ m). scenario must be done with caution and calls for In this simplified illustration, the NPV estimates at more detailed assessment. first indicate trade-off between investing in irrigation In addition, the economic model estimated the and in hydropower. In reality, however, any trade-off employment impact of the scenarios. One of the will depend on additional conditions. Moreover, eco- important benefits from developing irrigation for nomic gains from energy generation and agricultural agricultural productivity would be the substantial expansion are extremely sensitive to unit pricing. creation of jobs (in addition to benefits such as diver- Scenario 5A and Scenario 6A explore the impact of sification of the economy, food security and so forth.). coordination of irrigation (moving irrigated area Hydropower investments, on the contrary, create from upstream to downstream) and the NPV gains more employment initially and less over time. Yet indicate that any negative trade-off could be offset. the ability to supply increased and more reliable en- Table 3.4. lists the total NPV of each scenario ergy is directly crucial for driving economic growth and water using sector or activity, as well as employ- and job creation. As the model cannot fully estimate ment effect. Total NVP estimates illustrate the sig- the employment impact, the numbers are more in- nificant gains that could be achieved in hydropower dicative of potential and analysis of the employment and agriculture, but also how there appears to be figures calls for the same caution as with NPV. a trade-off in investments. Due to reasons outlined In terms of NPV, increased hydropower produc- above as well as the importance of high IRR, these tion would produce significant economic benefits. should be analyzed with caution. 80 Summary of Findings Figure 3.4. Summary of economic analysis: Net present value and employment results by development scenario (compare to current situation) 2,000 300,000 Scenario 2A with coordinated operation Net Present Value (million US$) ­ compared to current situation 1,500 250,000 1,000 Number of direct full-time jobs 200,000 500 0 150,000 SAPP + E- ows ­500 SAPP Plan 100,000 Other ­1,000 projects Coordinated Balanced HPP operation development 50,000 ­1,500 Hydro development Irrigation development ­2,000 0 1 2 2A 2B 2C 2D 3 5 5A 7 8 Scenario NPV Other sectors NPV Other projects NPV Flood protection NPV Agriculture NPV Hydropower Employment 3.5 conclusion described earlier. It indicates a step-by-step ap- proach to determining the threshold values for the Figure 3.5. was developed from the modeling results potential joint development of the hydropower and and in accordance with the analytical framework agricultural sectors. Table 3.4. Net present value (US$ m) and employment potential (jobs per year): Scenarios 1­8 Flood Employment Scenario Hydropower Agriculture Other sectors Other projects protection Total NPV (number of jobs) 1 585.33 0.00 23.24 0.00 0.00 608.57 0 2 1,003.50 0.00 3.16 0.00 0.00 1,006.66 3,065 2A 128.55 0.00 65.10 0.00 0.00 193.65 3,065 2B 1,180.11 0.00 66.36 0.00 0.00 1,246.47 3,065 2C 906.60 0.00 64.18 0.00 0.00 970.78 3,065 2D 1,515.82 0.00 63.31 0.00 0.00 1,579.14 3,065 3 ­872.49 526.78 22.90 0.00 0.00 ­322.82 247,902 4 ­3,798.85 2,397.04 ­13.01 0.00 0.00 ­1,414.81 1,131,677 5 ­398.28 526.78 23.90 0.00 0.00 152.41 250,967 5A ­275.22 545.30 24.44 0.00 0.00 294.52 259,364 6 ­3,807.92 2,386.34 ­9.75 0.00 0.00 ­1,431.34 1,134,742 6A ­3,630.17 2,407.37 55.44 0.00 0.00 ­1,167.36 1,131,677 7 ­467.41 526.78 24.47 32.59 0.00 116.44 273,269 8 ­769.46 526.78 26.73 32.59 72.67 ­110.68 273,269 Note: The substantial social and environmental benefits associated with Scenario 8 have only been partially quantified. Therefore the NPV value for Scenario 8 is highly underestimated. 81 The Zambezi River Basin: A Multi-Sector Investment Opportunities Analysis Figure 3.5. Potential for energy generation and irrigation by development scenario 45,000 SAPP with full HPP coordination Desirable (Scenario 2D) development zone 40,000 Firm energy generation (GWh/year) 35,000 SAPP + coordinated IP SAPP (Scenario 2A) (Scenario 5A) SAPP + IP (Scenario 5) 30,000 tory SAPP + IP + Flood protection + Coordinated existing HPPs ced trajec Other projects (Scenario 1) Balan (Scenario 8) 25,000 Base Case Current situation (Scenario 0) 20,000 IP (Scenario 3) 15,000 0 200,000 400,000 600,000 800,000 1,000,000 Irrigated area (ha/year) This report has analyzed a set of develop- · With cooperation and coordinated operation of ment scenarios for growth-oriented investments in the existing hydropower facilities found in the water and power in the Zambezi River Basin. The Basin, firm energy generation can potentially scenarios represent a range of options that may be increase by seven percent, adding a value of considered by the eight riparian countries in the $585 million over 30 years with essentially no course of deliberations over cooperative develop- major infrastructure investment. ment and management of the water resources of · Development of the hydropower sector ac- the Basin. The analysis focused on hydropower cording to the generation plan of the SAPP and irrigation as key investment areas. The wa- (NEXANT 2007) will require an investment of ter needs of closely related sectors and topics-- $10.7 billion over an estimated 15 years. That water and sanitation, flood management, environ- degree of development will result in estimated ment, tourism, wetlands--were also taken into ac- firm energy production of approximately count. Water users in these sectors were considered 35,300 GWh per year and average energy to be legitimate stakeholders with first-priority production of approximately 60,000 GWh claims on water allocation. per year, thereby meeting all or most of the The main findings of the analysis are: estimated 48,000 GWh per year demand of the riparian countries. · The ZRB and its rich resources present ample · With the SAPP plan in place, coordinated op- opportunities for sustainable, cooperative eration of the system of hydropower facilities investment in hydropower and irrigated agri- can provide an additional 23 percent genera- culture. tion over uncoordinated (unilateral) operation. 82 Summary of Findings The value of cooperative generation therefore the water in the system at this time. But they appears to be quite significant. might affect other sectors and topics, such as · Implementation of all presently identified tourism and the environment, especially dur- national irrigation projects would expand the ing periods of low flow. A more detailed study equipped area by some 184 percent (includ- is warranted. Similarly additional detailed ing double cropping in some areas) for a total anaylsis is needed for assessing the impact of required investment of around $2.5 billion. climate change. However, this degree of development of the · For the Lower Zambezi, restoration of natu- irrigation sector, without further development ral flooding (for beneficial uses in the Delta, of hydropower, would reduce hydropower including fisheries, agriculture, and environ- generation of firm energy by 21 percent and mental sustainability) and better flood protec- average energy by nine percent. If identified tion could be assured by modifying reservoir irrigation projects were developed alongside operating guidelines at Cahora Bassa Dam. current SAPP plans, the resulting reduction Depending on the natural flooding scenario in generation would be about eight percent selected, these changes could cause reduction for firm energy and four percent for average in hydropower production (between three and energy. 33 percent for Cahora Bassa Dam and between · Cooperative irrigation development (such as four and 34 percent for the planned Mphanda moving 28,000 hectares of large infrastructure Nkuwa Dam). More detailed studies are war- downstream) could increase firm energy genera- ranted. tion by two percent, with a net present value of · Based on the findings for Scenario 8, a reason- $140 million. But complexities associated with able balance between hydropower and irriga- food security and self-sufficiency warrant closer tion investment could result in firm hydropower examination of this scenario. generation of 30,000 GWh per year and some · Other water-using projects (such as transfers 774,000 hectares of irrigated land. Those goals out of the Basin and for other industrial uses could be achieved while providing some level within the Basin) would not have a signifi- of flood protection and artificial flooding in the cant effect on productive (economic) use of Lower Zambezi. 83 References Beilfuss, R., and C. Brown (eds). May 2006. "Assessing Environmental Flow Requirements for the Marromeu Complex of the Zambezi Delta, Mozambique--Application of the Drift Model." Museum of Natural History/University Eduardo Mondlane. Maputo, Mozambique. Chubu Electric Power Co. Ltd. July 2009. The Study for Power System Master Plan in Zambia. 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