GET FiT Zambia announced the award of six solar PV IPP projects, totalling 120MW(AC). The lowest successful bid came in at $3.999c per kWh and the weighted average of all six successful projects is $4.41c per kWh.
This is the largest single solar PV tender implemented in sub-Saharan Africa (SSA) to date outside of South Africa, and is the first time a tariff below $4c per kWh is achieved through a public tender in SSA.
The GET FiT tender had a target outcome of 100MW(AC), but due to the favourable results, the GRZ and GET FiT Investment Committee decided to award an additional 20MWac.
Notably, the award was not based on price alone but was based on a total combined technical and financial score.
GET FiT is the government of the Republic of Zambia’s programme to facilitate private sector investment in small- and medium-scale Renewable Energy Independent Power Projects (IPPs) in Zambia.
The programme is a partnership between the Department of Energy and the German Development Bank, KfW, and is implemented by the GET FiT Secretariat (staffed by Multiconsult).
The consortiums that have proven successful in the tender are summarised below.
An important aspect of the tender design has been to ensure timely implementation and compliance to both technical and environmental compliance, including IFC E&S Performance Standards. These elements were captured in the technical minimum criteria and scoring.
- 1st Award – Two proposals of Joint Venture Building Energy & Pele Energy – Bulemu East & West– 20MW(AC) each at $3.999c per kWh(AC).
- 2nd Award- Two proposals of Joint Venture Globeleq & Aurora Power Solutions – Aurora Sola One & Two – 20MW(AC) each at $4.52c per kWh(AC).
- 3rd Award – Two proposals of Joint Venture of InnoVent & CEC – Garneton North & South Solar- 20MWac each at $4.80c per kWh(AC).
In addition to the awarded bidders, two consortiums have been awarded “Reserve” status.
GET FiT Zambia reserves the right to call upon these consortia, each of which has also submitted bids for a total of 40MW(AC) each, in the event that any of the awarded consortium is unable to either meet pre-established timeframes and/or meet compliance requirements.
No market distortions
Ryan Anderson, the Tender Agent Team Leader noted: “It is important to recognise that these tariff results represent a truly competitive outcome. Not only were developers required to find and acquire their own suitable sites and pay for shallow grid connection, but GET FiT Zambia has offered no form of grant financing, nor has it arranged for concessional finance.”
Marco Freitag of KFW Development Bank agrees, “what has made this such a competitive outcome is the bankable standardised transaction agreements, the effective tender implementation and the steadfast commitment of the government of Zambia and ZESCO.”
It is however noted that GET FiT Zambia made concerted efforts to facilitate bidders’ access to competitive finance, including ATI’s Regional Liquidity Support Facility which provides short-term liquidity backing for ZESCO’s offtake commitment under the
Trinity International LLP prepared the standardized transaction documents including the PPA, IA and GCA.
Orli Arav (GET FiT Investment Committee member) also emphasised the reputation and role of GET FiT Zambia and KFW Development Bank: “The GET FiT program has now established a track-record in two countries in terms of enabling renewable IPPs, first in Uganda, and now in Zambia. KFW’s role as an honest broker in terms of finalizing transaction documents and advising the government is central to the success of this model.”