(Reuters) - A Chinese bank and the Development Bank of Southern Africa (DBSA) will lend state-owned power utility Zesco Ltd $430-million to raise the capacity of a hydropower station by 360 MW, a minister said on Thursday.

Zambia, Africa's top copper producer, will need to raise its power generation capacity to ensure sufficient supply as demand is expected to rise on the back of new investments in mining and other sectors.

Energy Minister Kenneth Konga said funds from the Export and Import bank of China (EXIM) and DBSA would pay for the extension of the Kariba North Bank power station, located more than 130 km south of Lusaka, which is to be completed by 2012.

The hydro plant produces 540 MW, but that will rise to 720 MW by October this year when the last of existing four generators is upgraded, Konga said.

Reported by Reuters