Under the Electrification and Power Development unit, the Ministry successfully launched Statutory Instrument (SI) No. 79 of 2013 on Electricity Grid Code in 2013, This SI legally establishes technical requirements for connection to, and use of, the electrical transmission system by parties other than the owning electricity utility in a manner that will ensure reliable, efficient, economic, secure and safe operation. The Ministry with the support of the United States Aid (USAID) Southern African Trade Hub (SATH) has engaged a consultant to undertake the development of a Renewable Energy Feed in Tariff (REFIT) Policy for Zambia. The objective of the REFIT is to encourage private sector participation in the development of renewable energy sources. During the period under review, study tours were undertaken to India, Kenya and Tanzania were undertaken to gain insights and lessons on the development and implementation of REFIT policy. The Feed – in – Tariff (REFIT) Policy is a mechanism designed to accelerate investment in renewable energy technologies and it is expected to be ready by the end of 2014.
In its quest to ensure sustainable development of the power sector, on 27th June 2012, the Secretary to the Cabinet appointed an Inter-Ministerial Committee which was chaired by the Ministry to review the existing existing Bulk Supply Agreement (BSA) with the objective of providing solutions to the contentious issues surrounding these Agreements. During the privatisation era, the BSAs were facilitated by Government of the Republic of Zambia as long term Agreements with long term electricity tariffs as an incentive to lure foreign firms to take up ownership of the local mining companies then. However, with the prevailing high prices of copper and other metals in the country, this incentive has outlived its usefulness considering that mining is highly profitable. Despite the high prices of copper, the mines have continued to pay low electricity tariffs which are impeding further development of the power sector in cognisant of the high cost of power from the Independent Power Producers.
Arising from the work of the Committee, a Cabinet Memorandum was developed with the view of enhancing the development of the power sector as well as in addressing the challenges surrounding the BSAs. The Cabinet Memorandum was reviewed on 28th August 2014 at Cabinet Office with all stakeholder and following the meeting furthers reviews are being made to ensure sustainable solutions are put in place to address electricity tariffs for mining sector and the power sector at large.
Under the GRZ, Global Environmental Facility (GEF) and the United Nations Environmental Programme (UNEP), for Renewable Energy Based Electricity Generation for Isolated Mini-grids project,, three mini grids have been developed as follows:
(i) 1 MW mini-hydro power plant in Shiwang’andu which His Excellency the President of the Republic of Zambia, Mr. Michael Chilufya Sata commissioned on 5th December, 2012;
(ii) A 60 kW solar project in Mpanta, Samfya District, Luapula Province was completed and is operational. The Mpanta, Solar Mini-grid is servicing about 450 clients including a Clinic, School, Households and shops in the market.
(iii) A 1 MW Biomass Gasification Project in Kitwe which will be developed by Copperbelt Energy Corporation is currently under a tender process for procurement of an Engineering, Procurement and Construction Contractor. The plant will cost about US$3.8m. Part of the funding for the project will be obtained from the Global Environment Fund (GEF), through a UNIDO facility managed by the DBZ. The rest of the funding is expected to be raised through a combination of debt and equity. In order for the CEC to qualify for a subsidy from Rural Electrification Authority (REA) for the purpose of implementing the project, the site where the plant will be located was declared as a rural area through the issuance of Statutory Instrument No. 37 of 2013. Attached is the afore-mentioned SI for your reference.
In line with the objectives of the National Energy Policy, the Ministry has been facilitating a number of power projects aimed at increasing the generation capacity to address the energy deficit in the Country. The power projects that have been completed during the period under include 360MW Kariba North Bank Extension and the 50MW Heavy Fuel Oil Power (HFO) Plant in Ndola. The plant has contributed significantly to the improvement of voltage profile on the Copperbelt Province. Other power projects that have reached advanced stages in terms of development include the 15MW Lunzua hydroelectric project and 120MW Itezhi-Tezhi hydroelectric project which are scheduled to be completed by September 2014 and June 2015 respectively. In addition, the first machine of 150MW for the 300MW Maamba Collieries Limited (MCL) Coal fired thermal plant in Siazongwe, Southern Province, is expected to be completed by October 2015 and the second machine by February 2015.In its quest to develop the power sector, the Ministry continued to implemented measures that were aimed at increasing electricity generation. The Ministry and its public and private partners continued implementing several projects which are at various stages to completion. Generation projects include the construction of Itezhi - tezhi, expansion projects such as Lunzua power expansion and Chishimba Falls power expansion.
As a way of ensuring reliability and quality of supply in our country particularly in Northern, Muchinga, Luapula and Eastern Provinces, the Government commissioned the construction of the 330 Kilo Volts Pensulo-Kasama Transmission Line and the 330 Kilo Volts Pensulo–Lusiwasi–Msoro–Chipata Transmission Line. Furthermore, financing agreements were signed with various financing institutions with regard to transmission lines such as Itezhi Tezhi - Mumbwa - Lusaka West and Leopard Hills Lusaka - Luangwa. The Itezhi-Tezhi Mumbwa-Lusaka Transmission Line is being financed by AFD, European Investment Bank (EIB) and African Development Bank (AfDB) and works are expected to commence by October 2014.
in addition to the above, government in partnership with the world bank is also upgrading and reinforcing the existing ZESCO transmission backbone infrastructure along the Kafue Town- Muzuma- Victoria Falls corridor from the current 220 kilo volts to 330 kilo volts in order to improve the reliability of infrastructure. The project is expected to be completed before the end of 2015.
Further to the above, Government signed a financing agreement with the international development association (IDA) on 3rd October 2013 for reinforcement of the Lusaka transmission and distribution network with the objective of improving power quality supply.
Transmission line development projects such as the Pensulo-Kasama and Pensulo-Msoro Transmission lines have reached an advanced stage. The lines are expected to be commissioned in 2015. Furthermore, financing agreements were signed with various financing institutions with regard to transmission lines such as Itezhi Tezhi - Mumbwa - Lusaka West and Leopard Hills Lusaka - Luangwa.
In order to ensure development of the electricity sub sector, Government continued the implementation of the multi-year tariff mechanism, in an effort to ensure cost reflective tariffs. Cost reflective tariffs will help to attract public and private investments in the sector. In July this year, the Energy Regulation Board awarded ZESCO Limited an increment in electricity tariffs across all consumer groups (except mining and exports) an average of 16%. On Bulk Supply agreements between ZESCO and CEC were adjusted by an average of 28.8% and tariffs between CEC and its customers were adjusted upwards by 17%.