LUSAKA, Nov. 25 (Xinhua) -- The World Bank has said it is waiting for a response from the Zambian government on a report it submitted on the proposed development of Kafue Gorge Lower Power Station.

The International Finance Corporation (IFC), the financing arm of the World Bank, recently completed the first phase of its due diligence and analytical work on the proposed development of the power station which is expected to add 750 megawatts of electricity to the southern African country's power grid, local newspaper the Times of Zambia reported on Wednesday.

World Bank Manager for Zambia Kapil Kapoor said the IFC has submitted its report which contains various proposals on the seize, financing needs and options and institutional arrangements to the Zambian government last month, adding that once the government takes certain steps, the next step would be to identify a sponsor for the project.

He further said given the size of investment needed, which would be in excess of 1.5 billion U.S. dollars, the World Bank anticipates that there would be multiple financiers for the project.

The Zambian government last year issued a tender for the construction of the power plant and then appointed the IFC to assess the cost of the project.

Zambia's power consumption has increased by 70 percent in the last five years, and demand from mining activities is expected to double again by the end of this year, a situation that will put further pressure on the existing generation capacity.

Zambia is believed rich in hydropower, while it usually exports to neighbor countries. But with the increase of economic activities in the country itself, power supply appears a serious shortage to its domestic consumers.

Zambia has experienced two nationwide power failures in the first half of this year, highlighting the country's urgent need for more power generation.

Zambia's power utility firm Zesco Limited said earlier this week that the Zambian government should put in place a clear policy on developing small hydro power projects because the country's demand for electricity has been increasing and this may lead to serious power shortages

The company has said the southern African country is likely to face serious power cuts after 2010 if nothing is done to increase generation of power because of increased electricity demand.

The company's acting Managing Director Cyprian Chitundu said there is need for the quick construction and completion of small hydro projects, which are currently being developed to offset the looming power deficit.

Zambia generates 1, 400 megawatts of electricity and consumes about 800 megawatts during the day and 1, 500 at peak periods in the evening.

Earlier this year, Chitundu, who submitted budget estimates for the next year, said more funds are needed to meet the anticipated electricity demand, adding that the power utility firm currently has a weak financial position partially caused by its high debt it had undertaken to invest in its infrastructure development whose total loan stood at 160 million dollars.

According to Chitundu who submitted the budget in October, the company needs about 1 billion U.S. dollars to meet the expected rising demand for electricity in the country.