IDC Zambia to develop at least 600 MW of solar power

Predident Lungu

By Mutale Kapekele

The infamous load shedding may become a thing of the past or at least reduce should the development of two 50 MegaWatts solar power PV projects funded by the  International Finance Corporation (IFC), a member of the World Bank Group, come to fruition.

The IFC has signed a memorandum of understanding with the Industrial Development Corporation of Zambia to explore development of two 50 MegaWatts solar PV independent power projects in Zambia through the Scaling Solar program.

The projects would be Zambia’s first utility scale PV projects, providing competitively priced, clean power that would reduce Zambia’s dependence on hydro resources and diversify the country’s energy supply mix.

Zambian President Edgar Chagwa Lungu has directed IDC Zambia to develop at least 600 MW of solar power in the shortest possible time to address the current power crisis. IDC Zambia 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 generating capacity in Zambia.

President Lungu, who is also the Board Chair of IDC Zambia, said, “The Zambian government is resolved to address the current hydro power shortages caused by low rainfall through active promotion and increased use of renewable energy technologies.”

Low rainfall over the past year has resulted in a national power generation deficit of about 560 MW. Scheduled power outages are already having a negative impact on homes and businesses.

The proposed projects would be situated on separate sites and developed by different private sector sponsors, based on open and transparent selections.  It is expected that both projects would engage Zambian partners in the ownership structure. The commercial structure is expected to follow IFC’s recently-launched Scaling Solar initiative.

“IFC is developing this partnership with IDC Zambia to deliver affordable renewable energy that can mitigate the country’s ongoing energy crisis.” said Oumar Seydi, IFC Director for Eastern and Southern Africa. “The Scaling Solar program enables us to apply the full range of World Bank Group services to address Zambia’s challenges quickly and sustainably.”

IDC Zambia and IFC will seek to negotiate a formal advisory mandate within the next few weeks, under which IFC will be appointed as lead transaction advisor to IDC Zambia for the development of the projects.  Once this mandate is in place, project development will commence, with requests for prequalification expected to be issued to prospective developers within three months.

The Industrial Development Corporation of Zambia is domestic development finance institution wholly owned by the Zambian government, incorporated in early 2014. IDC Zambia’s mandate is to play a catalytic role in deepening and supporting Zambia’s industrialization capacity to support job creation and domestic wealth formation across key economic sectors. The IDC Zambia plays its role through evaluation, pricing and lowering the investment risk profile by serving as co-investor alongside private sector investors. IDC Zambia facilitates provision and raising of long term finance for projects. Simultaneously IDC Zambia serves as an investment holding company for state-owned enterprises and new investments that ultimately generates earnings for the proposed Zambia Sovereign Wealth Fund.