US $154m Deal inked to repower Zambia with small-scale solar plants

US $154m deal has been inked by the African Development Bank (AfDB) and Green Climate Fund (GCF) for the development of small-scale solar power plants in Zambia o strengthen its climate-vulnerable power supply.

According to the agreement, the two institutions plan to deploy 100MW of green energy in the African state, struck by severe drought for the better part of 2019. This will be done under Zambia Renewable Energy Financing Framework, set to run for five years.

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Zambia’s energy sector

The funds is set to support the government as it enacts a feed-in tariff scheme for green energy ventures in the country. US $150m of the total will be senior debt and standby loans for renewable IPP projects, most of which will be small-scale solar. The remaining US $4m will fund assistance to state and private sector players as they build expertise in the field.

Zambia’s energy sector is largely dependent on hydropower. As a result of erratic rains, declining water levels in Kariba Dam and increased electricity demand, the country has experienced a severe electricity supply deficit since approximately June 2015. Output for the sector is estimated at less than one third of installed capacity. Load shedding has led to increased costs of living.

Approximately 70% of the country’s electricity demand is driven by its mining sector, which benefits from highly subsidized electricity rates. Peak demand has been recorded at 1,960 MW. Growth in electricity demand has been estimated at between 150 MW and 200 MW per year. Upon completion, the solar power plant will reduce the country’s reliance on hydropower.