China Exim is providing a US$41mn loan to Zambia to construct a 120 kilometre power line between Kariba North and Kafue West, a region south of the country’s capital, Lusaka.

Zambia will get a 20-year loan, with a seven-year grace period and an annual interest rate of 2%.

The agreement was signed by Chinese ambassador Zhou Yuxiao and Zambian finance minister Alexander Chikwanda. Yuxiao says the power expansion project, which has been under construction by Sinohydro is almost completed, with two turbines with 180 megawatts each having been added to the existing power station. The transmission line is set to provide additional electricity to the Lusaka power grid, decreasing power cuts in the city.

Economic ties between the two countries has been strengthening over the last decade and trade volumes continue to rise year-on-year. They increased to US $3.8bn in 2013 from US$3.4bn in 2012, a trend that Zhou says will continue. China imports mainly copper from Zambia.

Over the last decade, there have been about 64 official Chinese development finance projects in Zambia, ranging from mining to power generation projects.