KELVIN CHONGO, Lusaka
SOME Zambians may be sceptical about the country’s prospects, but its renewable energy sector has rapidly emerged as a global leader.
It is investor-friendly, based on pragmatic policy, and thrives on the collaboration between Government and the private sector.
The emergence of the sub-sector was triggered in part by the 2008 power crisis and the subsequent onset of electricity rationing (load shedding).
Zambia could no longer ignore the incredible energy potential of its abundant sunlight and wind.
Government responded to the power crisis with bold targets in the Seventh National Development Plan (7NDP) and in its Vision 2030, which is the first long-term written plan for Zambia.
The 7NDP sets out ambitious but realistic goals and targets for the country to become “a prosperous middle-income nation” by 2030.
Zambia plans to increase electricity generation to 6,000 megawatts (MW) by 2030.
Today, renewables are delivering clean energy, jobs, technology, foreign direct investment, rural development, community benefits, skills and new research.
After decades of generous government subsidies, Zambia faced a critical shortage of electricity between 2015 and 2016.
Since then, its electricity generation sector is being transformed as a number of steps have been taken with increasing private sector participation.
In 2015, the International Finance Corporation (IFC), a member of the World Bank Group, launched its first-ever Scaling Solar project to attract investment in large-scale solar projects with a total capacity of 76MW.
On his foreign trips, President Edgar Lungu has not missed an opportunity to woo investors to take advantage of the country’s vast opportunities in the energy sector.
And the country’s State-owned power utility, Zesco Limited, also announced an increase in electricity tariffs of 75 percent in an effort to reduce Government subsidies for electricity, estimated at US$500 million. This released valuable tax revenue for the treasury, enabling it to channel resources into electricity infrastructure, as well as other sectors.
Last year, the World Bank Group approved an International Development Association loan of up to US$2.8 million to leverage around US$48 million in private sector-led development in solar energy in Zambia. This guarantee will support the development of a 34MW solar photovoltaic (PV) plant by Ngonye Power.
The backing of public international organisations has given renewed confidence to foreign companies investing in the Zambian energy sector.
One such example is the United States Overseas Private Investment Corporation (OPIC), which has funded the first utility scale solar power facility being supported by a US$13 million OPIC loan and a US$26 million loan from IFC.
OPIC president and chief executive officer Ray Washburn, who was recently in the country and toured its first utility scale solar power facility in Lusaka, said the 54MW PV power plant being set up will be operated in partnership with the Industrial Development Corporation (IDC), the Zambian public investment fund.
Mr Washburn said access to dependable and affordable energy is essential for Zambia to grow its economy and for people to reach their full potential.
“The US private sector is playing an important role in establishing that resource in emerging markets such as Zambia,” he said.
Mr Washburn said OPIC, the US government agency that invests in development around the world, looks forward to the project’s continuing construction and bringing online of a reliable energy source for thousands of Zambians.
“By embracing solutions like off-grid energy, mobile banking, and efficient irrigation, Africa has led the way in adopting technologies of the future that offer the potential to improve the way we all live and work.
“More than a quarter of our US$23 billion portfolio is in Africa. In Zambia, we’ve supported multiple projects, including a solar power plant, schools, investment in local farms and financial services for small businesses,” Mr Washburn said.
He said OPIC’s new ‘Connect Africa’ initiative aims to further integrate sub-Saharan Africa into the global trade market by focusing investment on transportation infrastructure like roads, ports, and airports; information and communication technology; and value chains to help ensure more locally-produced products can reach global markets.
On the other hand, Government is undertaking a World Bank project to upscale solar projects in the country.
The development objective of the Scaling Solar Energy project for Zambia is to increase solar electricity generation capacity and diversify electricity generation sources in the country.
World Bank country manager for Zambia Ina Ruthenberg said recently that the World Bank is financing the Scaling Solar energy project.
Government is working with the World Bank and IFC in scaling up solar energy.
“The joint IDC and IFC project addresses Zambia’s current power shortages by increasing the reliability and security of electricity supplies and putting Zambia on a path towards sustainable energy,” said Ms Ruthenberg.
According to Ms Ruthenberg, the project will finance the construction, operation, and maintenance of a new 55 megawatt peak (MWp) solar PV plant to be located in the multi-facility economic zone in Lusaka.
Presently, the IDC maintains a 100 percent ownership of the two solar projects; however, it is reported that majority shareholding will be reduced by the two winning bidders assuming majority control in each company.
And according to Rural Electrification Authority (REA) chief executive officer Geoffrey Musonda, statistics show that access to modern sources of energy in rural areas is as low as three percent of the rural population.
Mr Musonda said REA’s goal is to increase the electrification rate from three to 51 percent by the year 2030.
Meanwhile, Minister of Energy Mathew Nkhuwa says REA is working to ensure that rural areas get their portion of solar power by 2030 so as to enable citizens to get the benefits of electricity.
And Minister of National Development Planning Alexander Chiteme said Government, with support from the World Bank, is implementing a scaling up solar programme to address the current hydro-power shortages caused by low rainfall through active promotion and increased use of renewable energy technologies.
Mr Chiteme said Government intends to develop at least 600MW of solar power and anticipates that the first two projects, with a combined initial target capacity of 100MW, will create the opportunity for subsequent expansion and the rapid scale-up in renewable energy generation capacity in Zambia.
Solar energy development in Zambia continues what is already a growing trend of technological leapfrogging throughout the African continent.
Zambians understand that they may never be a part of the nationalised power grid and, therefore, readily accept solar energy infrastructure as a solution to this problem.
KELVIN CHONGO, Lusaka