Government has set aside USD 2.5 million for a special scheme to help Small and Medium Enterprises (SMEs) procure solar panels and attendant accessories to power their industries and businesses amidst climate change which has affected hydropower generation.
The scheme will provide funds for SMEs so that they shift focus towards alternative renewable energy sources.
Recently the Minister launched the Development Bank of Zambia/ Rural Electrification Authority Off-Grid Loan Facility (OGLF) to support private sector development in the Rural Electrification space in Zambia.
The US$26.5 million World Bank-funded project is being led and implemented by the Rural Electrification Authority (REA), with the Development Bank of Zambia (DBZ) as the apex lender and the Zambia National Commercial Bank (ZANACO) as the partner retail bank. The funds will work to facilitate projects that support private-sector-led energy provision in Zambia and create a robust pipeline to unlock further investments in the sector. This money can be accessed by SMEs to finance their endeavours to increase access to electricity in rural areas.
This facility is the first of its kind in the country and will go a long way in providing solutions to social, economic and environmental problems by attracting more funding in the sector. The Electricity Services Access Project (ESAP) Credit Line Facility is the DBZ’s first credit facility specifically targeted for renewable energy projects, which is an important achievement for the Department of Energy, REA, ZANACO, World Bank and DBZ in supporting the government’s effort to increase energy access. The initiative’s ultimate goal is to improve access to electricity in Zambia’s rural areas.Speaking at the loan grid facility launch in his key-note address as guest of honor, Hon. Kapala,disclosed that government had signed a $26.5 million loan financing agreement with the International Development Association of the World Bank for the Electricity Services Access Project (ESAP).
“I praised the project as a boost for private sector-led electrification within rural communities. Further, I stated that the initiative would assist the private sector in electrifying rural villages“.
Additonally, he posited that through ESAP, they were making steady progress in meeting the aspirations outlined in various Government policy documents such as the Rural Electrification Master Plan,the Vision 2030, and the 8th National Development Plan. He further revealed that, the New Dawn Government, had identified lack of private-sector participation as a major impediment to these efforts.
Meanwhile, DBZ Acting Managing Director, Maybin Muyawala, disclosed that the initiative is one of the many innovations the Bank has embarked on to develop and provide financial solutions to social, economic and environmental problems. “We are here to see and help the businesses and the business community in the market to thrive in the different sectors including the energy sector,” he stated.
Speaking at the same event, World Bank Representative Christopher Saunders said that the Bank will continue supporting the efforts of the government and the private sector in resolving the challenges the country is facing such as lack of adequate energy. He stated that the program will help benefit a lot that are in the line of solar production and that it will help benefit many in the rural areas.
ZANACO Chief Executive Officer Mrs Mukwandi Chibesakunda
said that her bank was committed to support the connecting of upto 1,217 by the years 2030. She said that the initiative had come at the right time when Zambia needed adequate investment in the energy sector. Mrs Chibesakunda also noted that with the effects of climate change having an impact on the people, the power generation capacity, as being the case recently, ensuring financing solutions is a game changer. Ms Mukwandi revealed that, ZANACO, being the interface with the private sector through the off-grid loan facility, will support the private sector-led electrification financing of renewable energy mini-grids as well as stand-alone solar systems. “As ZANACO we are committed to supporting governments target to electrify, 1,217 rural growth centres by 2030, and other projects that will benefit from interventions such as the financing mechanism we are launched. With access to electricity in rural areas being at 8.1percent, this has potential to undermine economic growth in the rural communities. Reliable energy is the life blood of any economy. We urge the private sector to leverage on the opportunity so that the nation can light up while unlocking the economic potential in rural communities,” she averred.
High ranking Executives who were present included Rural Electrification Authority (REA) CEO Eng. Linus Chanda – who said said that REA would like as REA to see the program succeed – and the ESAP Project Manager Nason Musonda. Also present were private sector representatives such as Matanda Mwewa, President of the Solar Industry Association of Zambia Yande Siame Mwenye, Managing Partner at Crowe Zambia, staff from REA, DBZ, World Bank, ZANACO and other private players.
The New Dawn Government has embarked on investing and diversifying the energy sector in order to ensure sufficient capacity of power is generated for the country’s economic growth.
Recently, while in the United Arab Emirates, President Hakainde Hichilema and I witnessed the signing of a Memorandum of Understanding (MoU) and a landmark Joint Development Agreement (JDA) between Zambia and the United Arab Emirates, aimed at facilitating massive investment in solar projects estimated at US$2 billion and able to generate more than 2000MW of power.
Hon. Eng. Peter Chibwe Kapala
Minister of Energy
01. 02. 2023