05.12.2019 – EUZBC Confers with Ministry of Energy on Energy Reforms

EUZBC confers with Ministry of Energy on Energy reforms

On 5 December 2019, the EU-Zambia Business Club, chaired by President Mr Henk Mulder, organised interactive, lively brainstorming session on the Energy Reforms. The EU Ambassador H.E. Jacek Jankowski and over 60 companies on the Government’s energy reform agenda attended to discuss this hot topic.

In his opening remarks, the EUZBC President of the board, Mr Henk Mulder thanked the government through the PS for gracing the event. He indicated that government plans to undertake reforms in the energy sector was crucial as the current energy situation has negatively affected the private sector and therefore needs to be addressed a s matter of urgency. He indicated that it was important for government to attract investment in the energy sector and promote energy efficient which will reduce on the cost in an effective way. However he cautioned on the need to strike a balance by being cognisant of the possible impact on private sector and the consumers.

The EU Ambassador emphasised that clear, transparent and streamlined procurement guidelines for project development are crucial for European companies to compete in partnership with Zambian and regional players in delivering the lowest prices for energy services, as shown by the recent auctions that Zambia has launched on solar power.

On behalf of the Ministry, PS Mr Trevor Kaunda shared insights on the recently adopted national energy policy and regulatory frameworks to pass the Electricity and Energy regulation Bills into law. Mr Kaunda further discussed the undertaking of ZESCO reforms and the implementation of cost reflective tariffs to tackle some of the root causes to the current energy crisis.

In the ensuring discussions, the following were some of the issues that were discussed included:

  • The need for Govt to urgently implement cost reflective tariffs in order to stimulate private investments in the power sector.
  • There are a lot of opportunities to provide solar home system in rural areas as only 30% of the population has access to electricity. However important to promote productive use of energy and not only for lighting for production of goods and services which can be sold to cover the electricity bills.
  • So far only about 100MW of solar but the country has potential to go as high as 800MW. There is need for right policies and right price to realise this potential
  • Bankability of projects remains a challenge as most private sector cannot develop projects and take it to bankable level as the requirements are very stringent
  • There is need for Govt to offer tax exemptions especially for off-grid power project for the private sector to encourage investments in rural areas
  • The need to diversify risk for developers not only financial risks but also other in the energy value chain
  • ZESCO is trying to increase the baseload in order to increase its capacity to take on power supplied by private investors. Also ZESCO wants to ensure it also deals/trade in energy in the region by building interconnectors near its borders with its neighbours
  • Government currently encouraging partnerships between public and private entities
  • Government and private sector to be weary of climate change as it affects energy supply.

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