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LUSAKA (Reuters) - Zambia’s state power utility ZESCO Ltd., and Tata Africa Holdings (Pty) of South Africa have issued an international tender for contractors to build a $230 million power station.

The companies said in a statement obtained by Reuters on Thursday that they had formed a new firm called the Itezhi-Tezhi Power Corporation Ltd. (ITPC) to oversee the construction of the 120 megawatts facility.

The Itezhi-Tezhi power project is part of Zambia’s planned $2 billion investments in power projects to plug a deficit which has forced the mineral-rich southern African country and other neighbouring countries to start rationing power.

The two firms said the project should be commissioned by June 2012 after the completion of contracts covering infrastucture, the power plant itself and electromechanical works.

“Itezhi-Tezhi Power Corporation Ltd. (ITPC) now invites interested bidders to submit bids for the design, supply, construction and commissioning of these enabling works,” the statement said.

“This contract will be jointly financed by Tata Africa Holdings Ltd. and ZESCO. In addition, ITPC intends to apply for a loan from financial institutions to meet part of the costs of the Itezhi Tezhi Hydro Electric Project.”

Other contractors will be needed to build roads, houses and water and sanitation by March 2009. The tender will close on May 2 this year.

Zesco said earlier this month it had opened negotiations with financiers from Japan, India and western nations for an immediate $600 million financing package to upgrade existing generation and transmission infrastructure and also for the Itezhi-Tezhi project.

Zambia’s mines, which are rich in copper, cobalt, gemstones and precious minerals, are having to trim output because of inadequate power supplies.

Power requirements in Zambia are expected to rise to 2,500 MW within the next five years from the current 1,600 MW as more mines begin to operate and production in industry rises.

© Reuters 2008. All Rights Reserved.