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Zambia prepares calls for new round of investments in solar power projects

Zambia has signed agreements that pave the way for a second round of investments to develop privately-financed solar power plants in the country under the World Bank-backed Scaling Solar programme.22 Mar 2017

The bank’s International Finance Corporation (IFC) said on 21 February the agreements launch the initial procurement process for “up to 200 megawatts (MW) of utility-scale clean energy”, to be followed by further procurements towards an eventual combined total 500 MW of renewable power.

The move marks Zambia’s second engagement with Scaling Solar “and follows successful auctions held in May 2016 for two solar photovoltaic (PV) plants of up to 50 MW each that attracted some of the world’s top renewable energy developers”, the IFC said.

Zambia’s first tender attracted 48 interested groups including international power sector developers EDF of France, Italy’s Enel group and Arizona-based First Solar.

“The winning developers and relevant Zambian government agencies are in the process of concluding their agreements, which are expected to be finalised in May 2017, and the World Bank Group’s board approved a package of financing and guarantees for one of the two winning bidders and will review the same for the second winner in the coming weeks,” the IFC said.

Acting chief executive officer of Zambia’s Industrial Development Corporation (IDC) Mateyo Kaluba said: “Completing a first solar public-private partnership in a country is a massive undertaking. The package of bankable documents, transaction structuring advice, and research that Scaling Solar provided saved us considerable time, attracted more competitors, and ensured a successful process.”

Oumar Seydi, IFC director of Eastern and Southern Africa, said: “The partnership between Scaling Solar and IDC Zambia is successfully delivering the affordable renewable energy needed to ease the country’s ongoing energy crisis. Access to electricity is vital for achieving development goals. In Zambia, Scaling Solar has helped create a market that will make it easier for the public and private sectors to work together to meet the country’s energy needs and expand opportunities for families and businesses.”

According to the IFC, the two procurement rounds in Zambia, along with Scaling Solar projects in progress in Senegal, Madagascar, and Ethiopia, “will combine to develop and tender over 1.2 gigawatts of solar power, bringing much needed generation capacity to countries struggling to meet their power needs”. The IFC said the programme is also being rolled out to other regions – with talks under way to expand Scaling Solar to countries in Asia and the Middle East.

Under Scaling Solar, the IFC has said a country can assess a project, manage a competitive tender, build a plant, “and start generating cheap, sustainable solar power within two years”. The IFC said this was “a fraction of the time it would take to do so independently and faster than other generation sources such as hydro and thermal”.

The IFC said the cost of solar PV technology "has fallen dramatically... solar PV can now deliver power at less than 15 US cents per kilowatt hour (US¢/kWh) with long-term price certainty, compared to more than 25 US¢/kWh for diesel fired power that is also subject to volatility with global oil markets".