UPDATE 1-Glencore plans joint $1.5 bln Zambia power project

By Shapi Shacinda

LUSAKA, Aug 21 (Reuters) - Swiss-based firm Glencore International AG [GLEN.UL] plans a joint investment with Zambia's Copperbelt Energy Company (CEC) to build a $1.5 billion hydro power station, a senior CEC official said on Thursday.

CEC chief financial officer Michael Tarney said the plant will generate 750 megawatts of electricity.

CEC is Zambia's sole power distributor to the vast copper and cobalt mines, and also said it plans to spend a further $300 million on generation expansion to boost supply to the mines.

"We plan to put in a joint bid with Glencore to develop the Kafue Gorge (Lower power) project, which is estimated to cost $1.5 billion once the government decides how it will be done," Tarney told Reuters in an interview.

Tarney said Glencore, the majority owner of the Mopani Copper Mines (MCM), Zambia's second largest copper producer, wants to invest in the power project to boost supply to its units, the Mufulira Smelter, Nkana and Mufulira copper mines.

"Glencore wants to invest in power generation in order to have the confidence that power will be available (at its mines) and also as a commercial investment," he added.

Tarney said funding details for the project would be disclosed later.

The World Bank's private sector arm, the International Finance Corporation (IFC), which the government mandated to conduct a fresh feasibility study on the project, would receive bids from foreign and local firm for the project.