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Energy Sector Developments
At Reagan Blankfein Gates Legal Practitioners (RBGLP), we recognise the pivotal role of the energy sector in Zambia’s economic development and the well-being of its citizens. The sector is undergoing significant transformations, driven by policy reforms, infrastructure investments, and a shift towards sustainable energy sources.
Overview of Zambia’s Energy Sector
Zambia’s energy landscape is characterized by a diverse mix of resources, including hydroelectricity, coal, petroleum, and renewable energy sources such as solar and biomass. Hydropower has traditionally dominated the energy mix, accounting for approximately 84% of electricity generation. However, recent droughts have exposed the vulnerabilities of over-reliance on hydroelectric power, leading to increased load shedding and a push for diversification.
Climate Compatible Growth
Recent Developments
1. Policy and Regulatory Reforms
- Electricity Act No. 11 of 2019: This act governs the generation, transmission, distribution, and supply of electricity in Zambia, promoting private sector participation and competition.
- Energy Regulation Act No. 12 of 2019: Administered by the Energy Regulation Board (ERB), this act provides for the licensing of entities in the energy sector, ensuring compliance with standards and regulations.
- National Energy Policy (NEP) 2019: The NEP outlines the government’s commitment to ensuring universal access to clean, reliable, and affordable energy, emphasizing the development of renewable energy sources and energy efficiency.
2. Renewable Energy Initiatives:
- Global Energy Transfer Feed-in Tariff (GET FiT) Program: Supported by the German Development Bank (KfW), this program aims to develop 120 MW of solar photovoltaic (PV) and 100 MW of small hydro projects, facilitating private sector investment in renewable energy.
- Choma Solar Power Station: A 60 MW solar PV plant with an attached 20 MWh battery energy storage system is under development in Choma District, Southern Province, expected to be commissioned by September 2025.
- Itimpi Solar Power Station: Commissioned in April 2024, this 60 MW solar farm in Kitwe District contributes to diversifying Zambia’s energy mix and enhancing energy security.
3. Investment and Infrastructure Development:
- Maamba Collieries Expansion: In response to power shortages exacerbated by drought, Maamba Collieries plans to construct a 300 MW coal-fired power plant, with an estimated cost of US$400 million, to be completed over two years starting August 2024.
- World Bank Support: The World Bank granted US$100 million to Zambia in March 2024 to enhance energy access and reliability, supporting policies outlined in the 8th National Development Plan and Vision 2030.
4. Energy Efficiency Measures:
- Energy Efficiency Strategy and Action Plan (EESAP) 2022: This plan proposes various activities to achieve sustainable energy development and create a market environment that promotes increased private sector participation.
Challenges and Opportunities
Despite these advancements, Zambia faces challenges such as regulatory bottlenecks, infrastructure deficits, and the impacts of climate change on hydropower generation. However, opportunities abound in renewable energy investments, particularly in solar and wind, given the country’s favourable climatic conditions. The government’s commitment to policy reforms and international support further bolster the sector’s growth prospects.
RBGLP’s Role in the Energy Sector
At RBGLP, we offer comprehensive legal services to stakeholders in the energy sector, including:
- Regulatory Compliance: Advising clients on navigating the complex regulatory landscape to ensure adherence to national and international energy laws.
- Investment Advisory: Assisting investors in identifying opportunities and managing risks associated with energy projects in Zambia..
- Contract Negotiation: Assisting investors in identifying opportunities and managing risks associated with energy projects in Zambia.
- Policy Advocacy: Engaging with policymakers to contribute to the development of a conducive environment for energy sector growth.
Conclusion
Zambia’s energy sector is at a transformative juncture, with significant developments aimed at enhancing energy security, sustainability, and economic growth. RBGLP is dedicated to providing the legal expertise necessary to navigate this evolving landscape, ensuring that our clients are well-positioned to capitalize on emerging opportunities.