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LUSAKA (Reuters) – India’s ERA Group plans a major thermal power project in Zambia, with investment of $1.8 billion, to generate up to 1,200 megawatts of power in the long term, a senior company director said on Friday.

ERA Group director Ajay Mishra also said the firm would soon start prospecting for coal in southern Zambia, which would be used to operate the thermal electric power station.

“We are (going to be) investing about $1.8 billion in this (power) project. It is a very big project and we are going to need all the assistance we can get from government,” Mishra said.

ERA Group Senior Vice President Sanjay Bhatia said the Indian firm, which is involved in power and other projects in India, would separately invest up to $50 million to grow rice and maize on 6,000 hectares of land in the southern African country, but gave no further details.

Officials said the project would start once land was identified in Zambia, which uses only 10 percent of more than 40 million hectares of arable land.

Mishra said the power plant would initially generate 250 megawatts, which would then rise by an additional 250 megawatts by the end of 2011. At peak, generation capacity would be 1,000-1,200 megawatts.

Mishra said tendering for construction work would be opened in August. Officials said the power project would be undertaken by ERA Group’s subsidiary ERA Engineering Innovations.

The initial tendering process started in April for the construction of a power station at Maamba Collieries, where official data shows there are 78 million tonnes of coal deposits that should last more than 70 years.

Zambia, like many other southern African countries, is facing a critical shortage of power to operate its vast copper and cobalt mines, the country’s economic lifeblood. It is rationing power especially to domestic consumers.

“We know that ERA is a well respected (company) in India and we are pleased that you have shown interest to help develop our economy,” Zambia’s Vice President Rupiah Banda Banda said on Friday, promising the government would expedite investment procedures to commence the projects.