Zambia's Solar Boom: New Deals Power the Future

Zambia’s solar market is booming – new procurement tools are unlocking record‑breaking projects

Zambia has become one of Africa’s hottest spots for renewable‑energy investment, thanks to a suite of fresh procurement mechanisms, a carbon‑finance facility backed by Norway, and the opening of its power‑grid to private traders. Developers say they are witnessing “an unprecedented level of PPA activity” as the country moves from a hydropower‑dominated system to a dispatchable solar‑plus‑storage future.

Why the rush now? Drought, debt relief and a stronger credit rating

A severe 2023‑24 drought exposed Zambia’s reliance on hydropower – more than 80 % of its electricity comes from dams – and forced many factories onto diesel generators for over ten hours a day. At the same time, the government’s sovereign‑debt restructuring and a rating upgrade to a stable‑to‑positive outlook have restored investor confidence after the 2020 default. These twin shocks created a perfect storm: a clear need for reliable, non‑hydro power and a financing environment that can support large‑scale projects.

New procurement approaches that de‑risk projects

• Carbon Finance Procurement Facility – Norway purchases the carbon credits generated by Zambian renewables, adding a steady revenue stream that makes solar‑plus‑storage projects bankable.
• Competitive procurement framework – Published in May, the framework mimics South Africa’s REIPPPP, with standardized documents, regular bidding windows and a target first round around mid‑2027.
• ZAMWatt programme – A public‑private partnership between state utility ZESCO, Stanbic Bank and Africa GreenCo that uses open‑access rules to let industrial off‑takers buy directly from independent power producers, pooling generators and off‑takers to reduce single‑buyer risk.

These tools address the three classic barriers to African renewable finance: sovereign risk, creditworthiness of the off‑taker and the single‑buyer model.

Projects on the ground – capacity is exploding

• Operational solar capacity now stands at 1.15 GW (according to the Africa Solar Industry Association) and 1.64 GW is under construction.
• The largest operating plant, Itimpi II (136 MW), was switched on in May.
• Construction began in April on a 250 MW solar + 150 MW/600 MWh storage project – the biggest solar‑plus‑storage venture in the country to date.
• Zambia aims to deploy 1 GW of utility‑scale solar as part of its longer‑term plan, with the first competitive bidding window expected around mid‑2027.

Regional ripple effects – a template for neighbours

Analysts say Zambia’s reforms could be replicated in Zimbabwe, the Democratic Republic of Congo, Namibia and Botswana, all of which are eyeing similar liberalisation of their power markets. The main challenges remain currency volatility and the need for more transmission lines, but the Zambian model is already being touted as a regional blueprint.

What it means for Israel – a perspective on scale and economics

Using Israel’s typical residential yield of 1,700 kWh per kW per year (central region) and a residential tariff of ₪0.48/kWh, a single 10 kW rooftop system generates about 17 MWh annually, worth roughly ₪8,160 per year. At a turnkey cost of ₪3,150/kW, the system pays for itself in ≈3.9 years.

Zambia’s 1.15 GW of operational solar capacity is comparable to tens of thousands of typical Israeli 10 kW home systems. Given the CO₂ avoidance factor of about 0.5 kg per kWh, the Zambian fleet would avoid a substantial amount of emissions each year, on a scale that could be likened to removing a large number of passenger cars from the road.

For Israeli investors, Zambia’s emerging market offers a high‑growth, high‑risk‑adjusted opportunity: the carbon‑finance facility creates an extra revenue stream, while open‑access rules lower the barrier to entry for private power‑purchase agreements. Those looking to diversify beyond the domestic market can benchmark the Zambian payback against the Israeli 3.9‑year residential example, adjusting for higher financing costs and currency risk.

Outlook – the next three years will decide if the boom becomes a lasting market

If the first competitive bidding window launches as projected for mid‑2027, and the ZAMWatt programme successfully aggregates generators and off‑takers, Zambia could lock in several gigawatts of dispatchable solar‑plus‑storage capacity before 2030. That would cement its status as a renewable‑energy hub in Southern Africa and provide a model for other resource‑rich, land‑locked economies seeking energy security without relying on fossil fuels.

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Sources

• pv‑magazine – Zambia introduces new procurement approaches as solar interest booms
• Reuters – Zambia launches solar tender to diversify power mix
• Bloomberg – Zambia aims for 1 GW of solar by 2027 amid market reforms