ZESCO Limited has signed a Power Purchase Agreement (PPA) with ACSG Westland Power Company Limited, which will see the latter invest in solar thermal projects across the country. The agreement was signed on 18 July 2023 at a ceremony held at ZESCO Head Office in Lusaka and officiated by the Minister of Energy, Hon. Eng. Peter Chibwe Kapala. ZESCO Managing Director, Eng. Victor Mapani said Zambia’s electricity supply industry needs to be demonopolized to allow many players on the market contribute towards meeting the current power supply demand the country is facing. “The Zambian energy sector and specifically its electricity supply industry requires demonopolization. It is currently monopolized, which simply means steadily removing the exclusive responsibility placed on ZESCO Limited to meet the country’s power supply needs by having as many players as possible on the market. This will entail us encouraging more investors to invest in the power sector.” Eng. Mapani expects ACSG Westland Power Company Limited’s decision to invest in solar thermal power projects with an expected net capacity of 500MW+10 to tangibly contribute towards accelerating Zambia’s electricity supply industry on two fronts. “Firstly, this development will increase power generating capacity and help diversify the energy mix which presently has hydro sitting at 86 percent in Zambia; a risk by itself. We are further excited to note that this agreement guarantees us an initial investment and commissioning of 10MW solar thermal plant hopefully to be placed in Shangombo area and thereafter 500MW to come through. “ZESCO Limited therefore wishes to thank ACSG Westland Power Company Limited for deciding to invest in solar thermal power projects with an expected net capacity of 500MW +10”MW” he said. Meanwhile, AWPC Westland Power Company Limited Executive Chairman, Chief Obi Amuchienwa said the consortium has been lured to invest into solar thermal power projects due to the visionary leadership exhibited by the country’s President, Mr Hakainde Hichilema. “I am incredibly happy that after several engagements, we have reached a point of fruition. We were all encouraged by Zambia’s framework for power development which went through serious consultative sessions. However, you must admire the synergies right from the President’s vision to the vision of the Minister of Energy, and the vision of the heads of parastatals. They all speak with one voice and that they all want to get things done. “It is based on the reactions we got here. The professionalism, vision, drive, transparency, honest and the clear focus for the power agenda for Zambia which made us agree amongst ourselves that Zambia can be a regional hub to be able to launch this solar thermal technology, which is both clean, sustainable and something that can be driven, achieved within a short space of time.” And Energy Minister, Eng. Peter Chibwe Kapala said the signing of a Power Purchase agreement between ZESCO and ACSG Westland Power Company Limited was enabled by the stable and predictable business environment for local and foreign investors created by the Zambian government. Hon. Kapala r encouraged ZESCO’s Board and Corporate Leadership Team to ensure that all Power Purchase Agreements consented to by the national power utility were cost efficient and did not put ZESCO in perpetual debt that was an impediment to its sustained growth. “While the government has remained supportive of ZESCO’s expansion plans as contained in its 10-year strategic plan, it shall maintain an arm’s length distance in its operations. However, this is with an expectation that the Board and Corporate Leadership Team is making progressive and sound commercial decisions.”
We are opening up the energy sector to business and there's absolutely no need to impede development to come through when the country is undertaking reforms and removing bureaucracies to make it easy for the private sector to thrive. This is the message ZESCO Limited Managing Director Eng. Victor Mapani delivered to prospective investors during the Africa Energy Forum sector in Nairobi in June. “Our Chief Marketing Officer His Excellency the President, Mr. Hakainde Hichilema has opened up the country for business and the energy sector is not spared. There’s absolutely no need to impede development to come through when bureaucracies are being removed,” Eng. Mapani said. He explained that the recently approved electricity tariffs, expected to reach economic levels in the next five years, should give enough comfort to prospective investors who previously shunned Zambia on account of non-cost-reflective tariffs. “With this multi-year tariff structure that has been approved and put in place, there is a clear starting point and an indication of how the tariff glides over five years, be it domestic, industrial and also some commercial services,” Eng. Mapani said, adding that; “we can now know how much revenue you can actually galvanise in the next four to five years. We may currently not be cost-reflective for the sales but we believe in the next five years, we may just hit that line and beyond five years, this structure will continue.” He explained that ongoing energy reforms are aimed at increasing participation of private players and reducing ZESCO’s dominance of the energy sector. “That space is open. We can even actually allow a company that does not own assets to trade in power. You can just set up a business and you start running and the law allows that. We have signed up with one company so far, and almost done to start operating,” he said. He also revealed that the process to set up an Independent System Operator (ISO) regime was planned for next year as part of ongoing initiatives to augment existing laws that support increased private sector participation in power generation and trading. “By next year we should be able to have an ISO. We have now reached a stage where independent transmission services providers are allowed to own their own transmission lines and operate them but interconnected to the ZESCO system,” Eng. Mapani said. Eng. Mapani also told investors that the Public-Private Dialogue Forum which the government established to foster cooperation between investors and government departments and agencies would be key to resolving some of the challenges private players may face dealing in investing in the country. “The government has put in place a public private forum to ensure that these locked up projects are unlocked. A lot of such interactions have happened and from there, quite a number of solutions have come up. And this public private forum created an atmosphere of willingness by the government to accept more and more investors to come into the energy sector,” said Eng. Mapani.