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Africa Energy

Market Place(AEMP)

Zambian Government Presentation

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Section 1

Country Energy Sector Overview

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Potential Generation Consumption

34%

56%

4.5%

5%

National Electrification

Urban Access

RuralAccess

Peak Demand

Demand GrowthPer annum

2.1GW

2,878 MWTotal Installed Capacity

17% Of capacity developed by IPPs

• Solar Resource map has beencompleted with indication ofmassive solar potential for powergeneration

• 6000 MW of Hydro potential, of whichonly 2400 MW (40 %) is exploited

• Current small hydropower (SHP)between 1 MW to 20 MW with theinstalled capacity of around 44 MW, (0.7% of national hydro potential)

• Currently doing the Wind resourcepotential. The results are expectedby November 2018

Installed Capacity by source

• Coal Fired power plants by IPPs iscontributing 300 MW which is10% of the installed Capacity

Sector SnapshotI.

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Installed Generation CapacityI.

Name of Power Plant (including off-grid renewable energy) Technology Type Capacity (MW)

ZESCO - Kafue Gorge Hydro 990

ZESCO - Kariba North Hydro 720

ZESCO - Kariba North extension Hydro 360

ZESCO - Victoria Falls Hydro 108

ZESCO - Lunzua River Hydro 14.8

ZESCO – Lusiwasi Hydro 12

ZESCO - Chishimba Falls Hydro 6

ZESCO - Musonda Falls Hydro 5

ZESCO - Shiwang'andu Hydro 1

Itezhi-tezhi Power Corporation Hydro 120

Zengamina Power Limited Hydro 0.75

Lunsemfwa Hydro Power - Mulunguishi Hydro 31

Lunsemfwa Hydro Power - Lunsemfwa Hydro 25

Maamba Collieries Limited - Maamba Coal 300

CEC Plc – Bancroft Diesel 20

CEC Plc – Luano Diesel 40

CEC Plc – Luanshya Diesel 10

CEC Plc – Mufulira Diesel 10

Ndola Energy Company Limited Heavy Fuel Oil 105

Rural Electrification Authority Solar 0.06

Total 2,878.6

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Planned Generation ProjectsI.

Transmission Projects� The Ministry through ZESCO Limited is implementing a number of transmission

projects.� The projects range from reinforcement, rehabilitation and upgrading of the power

transmission and distribution infrastructure.

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Govt. Key Reforms/Actions Resources Required Breakdown

Generation USD 9 Billion

• Batoka Gorge US$ 5 billion – AfDB lead arranger for this project

• Kafue Gorge Lower US$ 2 billion

• IPPs US$ 2 billion

Distribution USD 1.5 Billion TBD

Transmission USD 1 Billion TBD

Rural Electrification USD 2 Billion Required up to 2030

Resources RequiredI.

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Section 2

Regulatory & InvestmentFramework

Policy Environment ü The government has put in place enabling polices and regulations meant to attract

investments in energy sector.

ü Energy Policy of 2008ØElectricity Act (under review)

Ø (Liberalized Power Sector - Private Players in Generation, Transmission and Distribution) Ø Open Access Regime - Grid Code sets framework for equitable access to transmission network by all IPPS. This is

yet to be operationalØEnergy Regulation Act (under review)ØRural Electrification Act (under review)

ü Vision 2030ØTo increase rural electricity access to 51% by 2030ØTo increase urban areas access to 90% by 2030ØTo expand the deployment and development of renewable and alternative energy sources in the

country’s energy mix from < 2% to 15% by 2030

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Policy Initiatives/Programmes

• GRZ working on the UN Sustainable Energy for All Initiative with support from AfDB Hub to support three interlinked objectives of;• providing universal access to modern energy services,• Doubling the global rate of improvement in energy efficiency,• Doubling the share of renewable energy in the global energy mix.

SE4ALL Initiative

• GRZ with support from World Bank is developing a resource map indicating the country’s solar and wind resource potential to guide investments on suitable locations

Renewable Energy Resource Map

Electricity Service Access Project (ESAP)

• Increase access to clean, reliable and more equitable and affordable energy andPromote renewable energy production and energy efficiency across Zambia;

• Two Components; 1) enhancement of policy, legal, regulatory environment, 2)Capacity building for renewable energy and energy efficiency

Increased Access to Electricity and Renewable Energy Production (IAEREP)

• Programme aims to help low income countries use new economic opportunities to increaseenergy access through renewable energy use

• Total amount of up to $40 million made available for Zambia to assist private sector power projectfinancing, of which $18 million is a grant and $22 million is a concessional loan

• Currently the government is in the process of preparing an investment plan for the programme

Scaling Up Renewable Energy Program for Low Income Countries (SREP)

Accelerate the implementation of access to electricity by the rural population;• On grid Electricity Access Expansion• Off grid Electricity Access Expansion• Capacity building and Project Implementation Support

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Section 3

Sector Mobilization Strategy

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Section 4

Proposed Government Action Plan

Addressing investment risks and bottlenecks

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1. Policy/Legislative and Regulatory Framework;2. Planning3. Procurement4. Licensing5. Tariff setting6. Zesco Restructuring and recapitalization7. Energy Efficiency and Demand side management8. Rural Electrification

Power Sector ReformsIV.

The government is committed to providing a conducive Investor destination in the power sector. As such it has embarked on a rigorous reform programme. A road map has been developed which will look at:

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Action Plan - Reforms

§ The Government has engaged a consultant to dothe Cost of Service Study to determine the realcost of production, transmission and distributionof electricity.

§ Study to be completed by August 2018

Cost of Service Study

§ Government constituted a Task Force to criticallyanalyze the financial, organizational andoperational structure of Zesco Limited given itscurrent challenges and recommend the bestreformation.

§ The report has been finalized for tabling totabling before Cabinet

Zesco Reforms

§ Government has initiated a process of reviewing Actsin order to

Create a supportive enabling environment to mobilizeprivate participation, transition to a competitive businessmodel for the power sector;

1. Electricity the electricity 2003

2. Energy Regulation Act No. 20 of 2007

3. Rural Electrification Act no. 20 of 2003

Act Review

IV.

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Action Plan

§ Build capacity in locals at small scale for microsolar project development of about 5 MW withthree years up to 2021

Human Capacity building & Technology development

§ Promote use of energy efficient buildings andappliances.

§ Promote Energy efficiency Technologies e.g solar waterheating in public institutions, hotels and lodges.

§ Promote energy efficiency technologies for industriesand Agricultural processes.

§ Promote initiatives for Demand Side Management.

Energy efficiency and conservation

§ Within three years, facilitate the development ofabout 200MW by 2021from the private sector atsmall scale. This will be in first phase

§ Facilitate the development of 600 MW of solar bythe IPPs at large scale

§ Conclude the resource mapping for Windelectricity generation mix by November 2018.

Untapped Renewable energy potential

§ Increase National Electricity Access from thecurrent 34% to 61% by 2030

§ Increase Electricity generation from 2,878MW in2018 to 6,378MW by 2030.

§ Develop transmission and distribution capacity tomatch the power generation trajectory.

Energy Access

IV.

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üGovernment is committed to implementing the actives highlighted in the road map;

üGovernment is committed in transforming Zesco Ltd into a commercially viable entity;

üGovernment is committed to migrating to Cost Reflective tariff as demonstrated on the 75% tariff increase effected last year; and

üGovernment is committed to working with the private sector in developing the energy sector for economic growth

ConclusionIV.

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Thank youFor

Your Attention