Investigating The Financial Viability of Hydropower Projects in Zambia: Case of Kafue Lower Hydropower Project.

The Model for Financial Analysis of Electric Sector Expansion Plans (FINPLAN) was used to assess the financial viability of the Kafue Lower Hydropower Project (KGL HPP) in Zambia. Three major scenarios were the focus of the analysis: capital structure (debt-equity ratio), climate change (drought conditions) and debt restructuring (payback duration). The capital structure of 85:15 debt equity ratio provided a stronger initial leverage while the 70:30 structure had faster dividend payouts creating a more favorable trade off for equity investors, despite its slightly lower IRR The project's Net Present Value (NPV) and Internal Rate of Return (IRR) were both above crucial levels, indicating that it is still robustly financially viable under drought stress. The trade-off between a shorter and longer payback period was between higher total profit and more stable annual debt coverage Based on the modelling results, new projects should be required to undergo climate stress assessment and prioritize robust finance frameworks.