Zambia signs 332 MW power purchase agreement with private sector

From the newsletter

Zambia is targeting an increase in electricity access from 53.6% to 100% by 2030. To further this ambitious goal, the Zambian government has inked a landmark Power Purchase Agreement (PPA) between state-owned power company ZESCO Limited and 29 Independent Power producers (IPPs).

• This commitment signals a needed trend in African renewables: Governments are finally taking charge of their countries' energy future.

• Other countries pioneering energy independence include Morocco with the 580 MW Noor Ouarzazate Solar Plant, one of the largest in the world, and Kenya's 800 MW  Olkaria Geothermal Plant making it one of the top geothermal producers globally.

More details

• Energy Minister Makozo Chikote and ZESCO Managing Director Eng. Justin Loongo (pictured above, left to right) stressed the timelines differentiating these agreements from Zambia’s past stalled renewable projects during the signing. 

• Unlike earlier initiatives, construction will break ground within eight weeks, with all 332MW operational by 2026 – a hard deadline to meet surging demand.

• Zambia's current installed capacity is 3777 MW, with a current electricity generation of 1469 MW. Through ZESCO, the nation has significantly reduced electricity imports, from 520 MW to 150 MW as of February 2025. However, national electricity demand averages 2800 MW, leaving a substantial 1600 MW deficit.

• To address this demand, driven by the mining, agricultural, and industrial sectors, the Zambian government is investing heavily in transmission infrastructure and encouraging private sector participation, aiming to secure $9 billion in energy investments

• The Micro-Generator Scheme, with a 270MWp capacity, will integrate small-scale solar projects, ranging from 100kW to 5MW, into the national grid. Complementing this, the Presidential Solar Initiative will add 62MWp through solar PV installations at government facilities. Construction is slated to commence within two months, with commissioning expected within three to eight months.

• A key objective of these initiatives is to reduce reliance on hydropower(currently accounts for approximately 90% of its electricity supply) by increasing the share of non-hydro renewables from 3% to 33%. 

• Furthermore, the introduction of an Open Access Policy will enable multiple power producers to supply electricity, promoting competition and efficiency.

• The government is also promoting household and business adoption of solar solutions, having already distributed 1,000 free smart meters to improve energy management.  Net-metering policies will allow consumers to sell excess power back to the grid.

Our take

• Signing PPAs is one thing, actually getting these projects built and connected to the grid is another. Zambia’s goal borders on improbability. The five-year timeframe is incredibly tight. While the solar projects are a positive step, achieving universal access requires a much broader, integrated approach.

• Realistically, it's more likely that Zambia will make significant progress towards universal access by 2030, rather than achieving it fully.

• The scale of these agreements, combined with the falling costs of solar, demonstrates that renewables are now a mainstream, cost-effective solution for Africa's energy needs. This is a game-changer for electrification efforts and economic development.