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Africa Development Community

Zambia is a land locked country located in Southern Africa and covers an area of 752,614 square kilometers. It shares its borders with the eight (8) countries namely; Democratic Republic of Congo (DRC), Tanzania, Malawi, Mozambique, Namibia, Zimbabwe, Angola and Botswana. In 2015, Zambia’s population was estimated at 15.5 million and is projected to reach 23.6 million by 2030 – assuming a net population growth rate of 2.8% per year (CSO, 2017). The population in rural areas is expected to grow from 8.2 million in 2011 to 10.1 million in 2020 and to 14.5 million by 2035, while the population in urban areas is expected to grow from 5.6 million in 2011 to 7.8 million in 2020 and to 12.4 million by 2035 (CSO, 2017). Zambia’s economy has for the most recent part been experiencing positive growth with the country’s real Gross Domestic Product (GDP) ranging from USD 12.76 billion in 2006 to USD 27.45 billion in 2013 at an average growth rate of 4.3% per annum. In 2015, the GDP was USD 16.96 billion (BOZ, 2016). In 2017 economic growth remained subdued at 3.8% due to weak performances by the services, mining, and construction sectors and it is forecast to strengthen to 4.5% in 2018 and 4.7% in 2019. In 2017 inflation was relatively stable at about 7%. The country’s energy consumption is mainly wood fuel (i.e., firewood and charcoal), which accounts for over 70% of total national energy consumption, putting a strong pressure on forestry resources; with a low energy consumption per capita of around 700 kWh/capita (2014). The electrification rate remains low with only about 31.2% of the population is connected to the grid). The country has a 8 very low resource diversification for modern energy services with almost total dependency on large hydropower power plants (nearly 84% of its installed power generation capacity in 2016) with high technical and commercial losses (a total of 18% of the production in 2015). Petroleum products are wholly imported into the country. Renewable Energy Context Renewable energy sources available in Zambia include Solar, Hydro, Geothermal, Wind, Small hydros (less than 20MW) and Biomass. The Government of the Republic of Zambia remains supportive and committed to facilitating the development of the renewable energy sub-sector. In addition, the Government continues to enhance its efforts in creating an enabling environment through establishment of appropriate policies, regulatory and institutional framework. However, development of renewable energy remains significantly low due to barriers that hinder the scaling up of renewable energy such as; (a) non-cost reflective electricity tariffs; (b) lack of a renewable energy strategy; (c) lack of robust policy and regulatory framework for renewable energy off-grid systems; (d) Inadequate human resource capacity in RE technologies; (e) Inadequate private sector participation; and (f) high investment capital costs and lack of financing mechanisms for renewable energy projects. The Zambia SREP IP will play a role in addressing the identified barriers for increased private sector involvement in renewable energy power generation for small- and medium sized Projects. The aim is to increase and diversify the national generation output through private sector participation using appropriate business models. Additionally, the SREP IP has the potential to transform the energy sector and facilitate increase in overall renewable energy production, boost economic development and improve access to clean energy while reducing the emission of greenhouse gases and other social-economic issues related to fossil fuel-based development. Further, this SREP IP will mobilise resources from other partners to support capacity development of the various public and private players in project preparation, feasibility studies, project development and project management