Finance Minister Situmbeko Musokotwane has said the 100 million dollars that the World Bank will provide to Zambia under the National Energy Advancement and Transformation- NEAT- programme will deliver an immediate financial boost to ZESCO.
Dr. Musokotwane said the approval of the NEAT programme will also support the procurement process for non hydropower renewable at the critical time when Zambia is experiencing an extensive drought.
Dr. Musokotwane said the -NEAT- programme will also support the implementation of the 10 year turnaround strategy and business plan that aims to return the ZESCO to financial sustainability and profitability.
He said the programme which has committed 700 million dollars over the next 10 years will also cater for rural electrification strategic plans and the energy sector integrated resource plan.
Dr. Musokotwane further said the programme will further augment Government’s efforts in enhancing reliability and climate resilience of the electricity sector by supporting implementation of the ZESCO strategy for improved customer management, reliability of supply and system resilience to climate change .
The National Energy Advancement and Transformation Program (NEAT), a multiphase program supported by the World Bank, will help Zambia step up the financial sustainability, reliability, and resilience of its electricity sector by 2033.
The $700 million NEAT program will help Zambia’s national power utility, ZESCO, return to sustainability, attract new private sector investment at scale to enable new growth, and deliver more inclusive development across the national territory. In doing so, it will also help to enhance the energy sector’s climate resilience through diversification of the energy mix.
The first phase of the program, which runs from 2024 to 2026, will provide a $100 million grant to improve ZESCO’s financial performance and operational reliability, and strengthen electrification financing mechanisms supporting the Rural Electrification Authority (REA). It will also improve Zambia’s procurement process for non-hydropower renewable energy projects.
“This International Development Association (IDA) grant represents an important step towards supporting Zambia to secure a sustainable and resilient energy future for its people. We are hopeful that by addressing the immediate financial challenges and laying the groundwork for a diversified energy portfolio, we are setting the stage for long-term economic growth,” said Achim Fock, World Bank Country Manager for Zambia.
The NEAT program will facilitate the implementation of the government’s recently launched Integrated Resource Plan and is underpinned by ZESCO’s and REA’s own multi-year strategic plans.
“The deliberate focus on increasing renewable energy capacity by a substantial 1,458 megawatts demonstrates the World Bank’s commitment to supporting Zambia to diversify its energy sources and enhance climate resilience,” said Yadviga Semikolenova, World Bank Practice Manager for Energy in Eastern and Southern Africa.
The NEAT program demonstrates the World Bank’s commitment to supporting Zambia’s energy policies contained in the 8th National Development Plan (8NDP), Vision 2030, and National Energy Policy (NEP). The program also aligns with the World Bank’s goals of ending extreme poverty and boosting prosperity on a livable planet by enabling access to reliable and sustainable energy sources.
Early this month President Hakainde Hichilema officially declared the prolonged dry spells in Zambia as a National Disaster and Emergency, citing the devastating impact of the El Niño weather phenomenon on the country’s agriculture, water availability, and energy supply.
The declaration, made in accordance with the disaster management act, underscored the severity of the situation, with millions of Zambians at risk of food insecurity and livelihood disruption. President Hichilema has outlined short-term measures including humanitarian relief efforts, importing food and electricity, and promoting alternative energy sources, alongside long-term strategies focusing on water harvesting and irrigation development to stimulate agricultural production. President Hichilema indicated that the government would realign the 2024 national budget to achieve the targeted measures.
Meanwhile Zambia’s power utility, ZESCO, is navigating negotiations with Mozambique to secure an additional 120 Mega Watts of power in response to the nation’s electricity deficit. Energy Minister Peter Kapala revealed this initiative during a parliamentary session addressing Zambia’s energy challenges.
ZESCO plans to withdraw 120 Mega Watts from the export market, aligning with existing bilateral contracts, to bolster domestic supply amidst the crisis. Additionally, ongoing negotiations between ZESCO and Ndola Energy Company Limited aim to resume operations at a 105 Mega Watt power plant by April 2024.
The government emphasized strategic institutions’ uninterrupted operation during load shedding, prioritizing entities like health facilities, water utilities, and industries. While ZESCO initiates load shedding to mitigate reservoir depletion, it anticipates monthly revenue losses of approximately $35 million. Long-term strategies outlined include renewable energy expansion projects and the completion of the Integrated Resource Plan (IRP) to sustainably address Zambia’s energy needs.
ZESCO commenced 8-hour daily load shedding on Monday, March 11, 2024. The decision followed a meticulous assessment of water levels in the Kafue and Zambezi basins.
