Construction of the power line will start in November 2011 and will be done by China’s TBEA, said Ernest Mupwaya, managing director of Zambia’s power company Zesco.
China has been investing across Africa as it seeks to secure raw materials to feed its own rapid growth.
“This development … will not only improve security and reliability of supply but also enhance cross-border power trade,” Mupwaya said during a signing ceremony for the loan.
The loan is for the 365 km (227 mile) stretch that falls within Zambia and will be paid over 20 years, with a five-year grace period.
The interconnector line will link Zambia, Tanzania and Kenya and should boost mineral exploration, agriculture and tourism in the region, he said.
The line will also help the development of greenfield hydropower stations in Northern Zambia whose construction, analysts say, continue to be hampered by lack of connectivity to the national grid.