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In the last ten years, Zambia has witnessed a number of disputes in the power sector, the bulk of which have revolved around utility Zesco. Under the new administration, the situation could become clearer – and more encouraging for investors.

Zambia’s incoming administration is well aware of the urgent need to address the dire financial position of the vertically integrated state utility Zesco. The restructuring of Zesco to improve the utility’s operations, and increase its autonomy and efficiency to ensure long-term financial sustainability was high on the United Party for National Development (UPND)’s campaign agenda.

The Lower Kafue Gorge project is set for commissioning in the coming days, as President Lungu continues his strategy of heavy investment in transport and power infrastructure in the run-up to polling day. However, if challenger Hakainde Hichilema prevails in the August election there are likely to be significant changes for state utility Zesco and for the dispute involving Copperbelt Energy Corporation, writes Chiwoyu Sinyangwe.

The Copperbelt Energy Corporation (CEC) has gone to the Lusaka High Court seeking a judicial review to halt the government’s latest attempts to seize its transmission line network, including those it jointly owns with Democratic Republic of Congo’s Société Nationale d’Electricité (Snel).

Hopes among private power producers in Zambia that Zesco might find a way to clear its arrears for electricity are fading, with one source saying “Zesco is technically insolvent.”

Following a series of setbacks for the government this year in its attempt to declare CEC’s network common carrier, there had been hopes a negotiated settlement could be agreed. However, further legal action now looks a certainty, writes Chiwoyu Sinyangwe in Lusaka The Zambian government has made a fresh bid to seize control of Copperbelt Energy Corporation (CEC)’s transmission and distribution lines by issuing a new statutory instrument (SI) declaring the company’s network as common carrier.

Commissioning of the 750MW Kafue Gorge Lower (KGL) project has been indefinitely delayed despite the first 150MW being completed, as the project’s Chinese partners seeks more financial security from heavily-indebted state utility Zesco.

Zambia’s Copperbelt Energy Corporation (CEC) has unveiled plans to add two further stages of expansion to its Riverside Solar PV plant near its Kitwe headquarters.    

Copperbelt Energy Corporation (CEC) has said the Covid-19 pandemic has contributed to delays in the project to develop two 20MW solar PV plants, Garneton North and South, in a consortium with France’s InnoVent. Awarded as part of the German development bank KfW-backed Global Energy Transfer Feed-in Tariff (Get Fit), which tendered 100MW of solar PV capacity in 2018, the Garneton plants were awarded on the basis of tariff bids of $0.048/kWh in April 2019.

The Energy Regulation Board (ERB) has said it will not allow Energy Market and Regulatory Consultants (EMRC) to delay the completion of the cost-of-service study further, after the UK-based firm said the Covid-19 pandemic had derailed its projected completion date. The study is expected to help resolve the impasse in the energy and mining sectors and set the tone for Zambia’s migration towards cost-reflective tariffs.

The High Court of Zambia has dismissed a government attempt to prevent the enforcement of a 26 February court ruling which had quashed  energy minister Matthew Nkhuwa’s move to declare Copperbelt Energy Corporation (CEC) as network common carrier. This latest stage in a protracted contractual dispute involving CEC, Konkola Copper Mines (KCM) and state utility Zesco means CEC can, in theory, try to recover outstanding debt from KCM.

The cash-constrained government has indefinitely shut the 42-year-old Indeni Petroleum Refinery, Zambia’s sole fuel processing plant, as it opts for short-term fuel supply contracts. The move underlines the financing challenges facing President Edgar Lungu’s government. Zambia had been meeting its fuel requirements through its refinery and imports of finished petroleum products through private suppliers.

Kalahari GeoEnergy has commenced the full technical and commercial feasibility study for Phase I of its Bwengwa River geothermal project, chief executive Peter Vivian-Neal told African Energy. The study will run through until September 2021, and a 200kW proof of concept pilot plant is expected to be installed by August 2021. Vivian-Neal confirmed that, subject to the result of the feasibility study and the receipt of statutory and licensing approval, construction is likely to start on the 10MW first phase of the full commercial plant in 2022.

Attorney General Likando Kalaluka has started the process of appealing the 26 February ruling by the High Court that energy minister Matthew Nkhuwa had acted illegally by declaring the Copperbelt Energy Corporation (CEC) network common carrier. On 5 March, the government obtained an ex-parte order restraining CEC from enforcing the ruling. Judge Elita Phiri Mwikisa heard the two parties in her chambers in Lusaka on 22 March and is expected to rule in the second week of April on whether CEC can proceed to enforce the judgment as the government takes the matter to the Court of Appeal.

Cape Town-based developer Red Rocket expects its 140MW Roggeveld Wind plant in the Northern Cape to reach commercial operations by end-year and has a number of other projects ready to close, chief executive Matteo Brambilla told African Energy. The company recently achieved commercial operations at the 4MW Kruisvallei hydroelectric power plant, selected under the renewable energy IPP programme (REIPPP) fourth round.