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Subscriber

Copperbelt Energy Corporation (CEC), Zambia’s largest supplier of power to the mining sector, is seeking to extend its long-term power supply agreement with Zesco before the current deal expires next year.According to sources close to the transaction, Zesco is reluctant to extend the 20-year Bulk Power Supply Agreement (BSA), creating uncertainty over the future of CEC. Zesco would prefer short-term agreements of about five years, with other clauses that make the deal more favourable to CEC to be renegotiated.

Zambia
Subscriber

State power utility Zesco has applied to the Energy Regulation Board (ERB) to increase tariffs by more than 300% in some cases to help clear its debts and offset the higher cost of generation from new plants.Residential tariffs for consumption up to 100kWh would rise to 0.47 kwacha (about $0.04) from 0.15, while consumption of 101-300kWh would remain at 0.85 kwacha and consumption over 301kWh would rise to 1.94 kwacha from 0.89.

Zambia
Issue 388 - 14 March 2019

Zambia: Zesco plans $500m bond issue

Subscriber

State-owned power utility Zesco has appointed Standard Chartered Bank as lead arranger for a $500m bond issue planned by May this year to help clear its debts. According to documents seen by African Energy, Zesco owes suppliers just over $900m, around a third of it to independent power producers (IPPs), and the bond aims to help clear the arrears. The total amount will be raised in two tranches, with $250m-$300m targeted in the first phase.

Zambia
Issue 388 - 14 March 2019

Zambia: Neoen launches solar plant

Subscriber

President Edgar Lungu has said Zambia wants to reduce the dominance of Zesco and attract more private investment into the power sector as he inaugurated the 47.5MW Bangweulu solar independent power plant in the Lusaka South Multi-Facility Economic Zone.“For a long time, the electricity company (Zesco) held on to a time when it was the only player in the energy sector, expecting to do all the generation projects. However, the electricity company should be ready for other investors to venture into energy generation,” Lungu said in remarks at the 11 March launch ceremony.

Zambia
Subscriber

Three international consortia have bid to develop the 2,400MW Batoka Gorge hydro scheme along the Zambezi River on the border of Zimbabwe and Zambia. The bidders are a consortium of Power Construction Corporation of China and General Electric, Salini Impregilo of Italy, and a joint venture of China Three Gorges Corporation, China International Water and Electric Corporation and China Gezhouba Group Company.

Zambia | Zimbabwe
Issue 384 - 17 January 2019

Zambia: Get FiT small hydro tender

Subscriber

German development bank KfW, on behalf of the government of Zambia, has invited companies to register by 6 February for the prequalification procedure of the Get FiT Zambia small hydro tender. The tender for developing, financing, procuring/constructing and operating small hydropower plants will target the award of up to 100MW of capacity in up to three rounds.

Zambia
Issue 382 - 06 December 2018

Zambia: Zesco restructuring

Subscriber

Zesco has set up a team headed by cabinet secretary Roland Msiska to implement proposed reforms to the utility, though concrete action is unlikely until after the 2021 presidential and general elections. The cabinet commissioned a diagnostic study in 2017 which made a list of recommendations.A source at the Ministry of Energy said the study recommended that Zesco be split into separate generation, transmission and distribution units. The report also called on the government to rein in Zesco’s wage bill, which absorbs 65% of revenues.

Zambia
Subscriber

Luxembourg-based Eurasian Resources Group has concluded power supply arrangements for its Frontier copper mine on the border between Zambia and the Democratic Republic of Congo (DRC). Eurasian announced on 26 November that a contract had been signed with Société Nationale d’Electricité (Snel), DRC commercial bank Rawbank and Zambia’s Zesco, which will supply 41MW. Frontier is an open-cast mine with facilities to produce copper sulphide concentrate, treating over 10m t/yr of copper sulphide ore.

DR Congo | Zambia
Subscriber

Fenix International announced this month that it has gained nearly 40,000 customers in the 11 months since it began selling its solar home systems in Zambia. The milestone was reached significantly faster than the company had expected and is one of the first successful large-scale expansions into southern Africa by a pay-as-you-go solar company. Fenix International Zambia managing director John Foye told African Energy that by comparison the company’s main competitor Vitalite had around 15,000 customers, while the other solar suppliers SupaMoto Energy and d.light were much smaller.

Zambia
Subscriber

The Get FiT secretariat in Zambia issued a request for proposals (RfP) for the procurement of 100MW solar photovoltaic (PV) capacity on 31 August and bids are due by 29 November. The Get FiT programme is being jointly developed and implemented by the Ministry of Energy and German development bank KfW to fulfil the government’s renewable energy feed-in tariff (Refit) strategy. The Get FiT secretariat in Zambia is managed by Multiconsult, which is also the implementation consultant. The programme received 41 project submissions from 24 solar power developers during prequalification.

Zambia
Subscriber

Enel Green Power has begun construction of the 28MW Ngonye solar project, the company announced on 22 August. Ngonye was one of two projects selected during the first round of the World Bank Group’s Scaling Solar programme in June 2016. The project is located in the Lusaka South Multi-Facility Economic Zone in the south of the country. It is expected online in Q1 2019 and will generate 70GWh/yr.

Zambia
Issue 374 - 27 July 2018

Zambia: CEC sale falls through

Subscriber

The acquisition of Copperbelt Energy Corporation (CEC) by the UK’s CDC Group and investment fund AP Møller Capital has collapsed after conditions could not be met within the regulatory timeframe. The pair had offered $380m for the company, which is listed on the Lusaka Stock Exchange, and the transaction was believed to have received support from President Edgar Lungu.

Zambia
Subscriber

The board of the African Development Bank (AfDB) has approved a $50m framework financing for projects with combined capacity of around 100MW selected through the Global Energy Transfer Feed-in Tariff (Get FiT) programme. The financing will mainly target solar projects, which will be bid into a reverse auction process overseen by German development bank KfW, with a maximum combined capacity of 100MW and maximum project capacity of 20MW.

Zambia
Subscriber

Zesco and senior officials are determined to press ahead with tariff increases despite the stalling of a cost-of-service study that was intended to form the basis of a new multi-year tariff determination. Negotiations have been under way since last year with large consumers, mostly mines, which are still in the process of agreeing an interim tariff. However, failure to complete the study could have implications for negotiations with the miners, who have used Zesco’s governance and performance to resist tariff increases in the past.

Zambia
Subscriber

An announcement by finance minister Margaret Mwanakatwe on 6 July that the government had completed a three-week investigation into its debt sustainability and “we know what debt we have and also we have shared the facts and figures with the [International Monetary Fund] IMF” illustrates how perilous its debt situation has become. A combination of inept governance and ugly politics means that President Edgar Lungu’s administration has lost credibility to the point that investors are sceptical of both its figures – the government claims to have $9.3bn of external debt – and its ability to get control of its finances.

Zambia