Construction on the $1,5-billion Kafue Gorge Lower hydropower project, in Zambia, would start in June next year, Zambia Ministry of Energy and Water Development office for promoting private power investment manager Israel Phiri said on Tuesday.

At current projections, the project, which has been delayed, would start at 600 MW of power generation, but would have a design capacity of 750 MW.

This would require an investment of between $1,5-billion and $1,8-billion to develop the project.

However, Phiri said the latest discussions have opened up the possibility to boost the project's design capacity to 800 MW. The costing for the increase would still have to be determined.

He said that the potential increase had come about as the developers had dealt with one of the technical issues faced by the project, which would now allow for such an increase.

Previously, construction on the project had been expected to start this year, after the financial close had been reached by the end of last year.

However, certain technical risks, the signing of power purchase agreements and weak credit markets had delayed the financial close of the project.

Meanwhile, Phiri said that 70% of the power generated at the project would be used domestically, while the remaining 30% could be exported. Transmission infrastructure to export the power to Zambia's southern neighbours was in place, he noted.

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