Zambia’s energy regulation board approves 3 projects

From the newsletter

The country’s Energy Regulation Board (ERB) approved three construction permits for the electricity and renewable energy sub-sector. These approvals cover activities from manufacturing renewable energy equipment to major infrastructure projects like the Kalumbila-Kolwezi Interconnector and two solar plants with a total capacity of 108 MW.

• This move coincides with Zambia’s recent policy change, which has reduced project approval timelines from six months to approximately 48 hours. The country is rolling out multiple energy projects to compensate for its decline in hydropower generation

• The mining sector and other energy-intensive industries are supplementing their grid consumption with off-grid solar solutions. Power wheeling from independent power producers is another avenue to explore, now that the wheeling policy is in operation.

More details

• Flagship projects include a $270M cross-border transmission line, a 100 MW solar farm, 8 MW off-grid solar PV system with battery storage in Kasempa, signalling a strategic push toward clean energy expansion in the country.

• Zambia’s energy landscape is dominated by hydropower, which accounts for about 80% of the country’s electricity generation capacity, supplemented by coal (9%), heavy fuel oil (5%), and a growing but still small share of solar photovoltaic (around 3%).

• This heavy reliance on hydropower has historically provided affordable electricity but has also exposed the country to significant vulnerabilities, especially during prolonged droughts that have led to severe power shortages and load shedding of up to 20 hours daily. These climate-induced disruptions have underscored the urgent need for diversification and resilience in Zambia’s energy mix.

• The recent ERB approvals and investments align with Zambia’s strategic shift toward expanding renewable energy sources, particularly solar power, and strengthening transmission infrastructure both nationally and regionally

• Diversifying away from hydropower and investing in solar and battery storage systems will reduce Zambia’s exposure to drought-related power deficits, ensuring a more stable electricity supply for households, businesses, and critical services.

• Reliable energy is also crucial for Zambia’s growing industrial and mining sectors, which are major electricity consumers. Faster project approvals and expanded capacity will support decarbonisation efforts and attract private investment, fostering economic diversification and job creation.

• However, the approved projects add 108 MW solar but only 20 MWh storage, a 5.4:1 energy-to-storage ratio. With Zambia’s hydro reservoirs at 45% capacity, evening peak demand requires at least 50 MWh storage per 100 MW solar to prevent curtailment.

• Despite this, Zambia is fast-tracking its renewables adoption this year. More projects in the pipeline include the Zambia-Tanzania Interconnector Project (ZTIP), backed by the World Bank, which exemplifies efforts to integrate Zambia into a broader Eastern and Southern African power pool, facilitating access to more affordable and sustainable electricity while reducing the risk posed by hydrological variability.

Our take

• Zambia wants to be Southern Africa’s energy broker, and it’s getting there fast. The Kalumbila-Kolwezi interconnector is Zambia’s play to dominate regional power trade. By plugging into the Southern African Power Pool and harmonising tariffs, Zambia can export surplus, import smartly, and anchor industrial growth across borders. The region needs Zambia’s strategy.

• Fast-tracked project approvals and private sector incentives are unlocking unprecedented investment. The ERB’s streamlined licensing and the government’s clear policy incentives are already mobilising significant private capital-targeting $9.5 billion out of the $11.9 billion needed for the energy transition.

• Zambia’s energy transition is a blueprint for resilience in a climate-challenged region. By rapidly scaling up solar and diversifying away from hydro, Zambia is directly addressing the chronic power shortages caused by droughts and climate variability.