THE African Development Bank (AfDB) has awarded Zambia a grant of US$1.5 million for technical assistance in the implementation of the Zambia Renewable Energy Financing Framework.
The grant, part of the AfDB US $51.5 million committed investment to the renewable energy financing framework, is meant to assist capacity-building of financial institutions, namely the National Pension Scheme Authority (NAPSA) and Zanaco in renewable energy investment.
The Zambia Renewable Energy Financing Framework was launched at the beginning of 2019 and is expected to cost a total US $154 million.
From the total US $154 million, the Green Climate Fund (GCF) committed an investment amount of US $52.5 million, while the AfDB co-financed US $51.5 million; while the other co-financiers will invest a total of US $50 million.
Speaking during the signing ceremony, AfDB chief utility management officer Liezl Cecilia Harmse said the lack of renewable energy financing, locally, was a major setback for up-scaling renewable investments in Zambia.
“The signing ceremony is a clear testimony of AfDB’s support towards a strong private sector development in renewable energy and building a robust and sustainable growth. The project also aligns with the bank’s 10-year strategy. It is well-known that lack of renewable energy financing, locally, is a major setback for up-scaling renewable investment in Zambia. The aim of the project is to support government in its efforts to catalyze private investment for small-scale renewable energy projects, thereby, accelerate the achievement of its electricity generation targets and the diversification of its energy mix,” said Harmse.
“The technical assistance grant comes with two components: capacity-building to local financial institutions and under GCF component support will be towards off-grid sector support to the Ministry of Energy and Rural Electrification Authority, which include operational support to the off-grid task force secretariat. This grant of US $1.5 million will be for three years will build the capacity of NAPSA, Zanaco and the Zambian financial industry in renewable energy and infrastructure financing. Under this project, it is proposed that the AfDB and the GCF will provide loans of US $100 million in the next three to 15 years.”
And speaking at the same event National Development Planning Minister Alexander Chiteme hailed the grant that he said was aimed at catalyzing private sector investment in the renewable energy.
“The energy project is aimed at catalyzing private sector investment in renewable energy whose participation is cardinal towards the country’s full realization of climate resilient development pathway. The African Development Bank is providing a total of US $1.5 million grant to cover the technical assistance to build capacity of the Zambia financial industry in renewable energy and infrastructure financing,” said Chiteme.
“The National Designated Authority in the Ministry of National Planning will be the executing agency for technical assistance component of the project, while the partners from the financial institutions are Zanaco and NAPSA. Today is a momentous occasion during which the Ministry of National Development Planning, in collaboration with AfDB, are reaffirming their commitment to this programme by signing the implementation agreements. The agreements are crucial in propelling the achievement of various government targets, such as improved access to electricity and diversification of power sources especially in rural areas.”
National Development Planning Ministry Permanent Secretary Chola Chabala signed the implementation agreements with NAPSA and Zanaco.