Local media Lusaka Times reported that director of USAID Zambia Mike Yates confirmed the development. “The United States government through Power Africa and USAID Zambia has approved…$2 million in funding to support Zambia’s first round of scaling solar,” he said.
Yates pointed out that the funding would lower project development costs by covering the success fees payable by developers to the International Finance Corporation (IFC) once the deal reaches financial close.
IDC Zambia is an investment company wholly owned by the Zambian government with a broad spectrum of sectors including the energy sector.
Yates said: “We applaud the Zambia government and the IFC for this innovative scaling solar venture. It has created a transparent, competitive bidding process to attract qualified solar power developers, and will offer adequate prices, streamlined procurement processes, and financing support to facilitate financial closure and implementation of solar power production.”
According to the media, Yates continued explaining the importance of electricity describing it as the lifeblood of any modern economy. He also stated that Zambia’s future economic prospects are closely coupled with the energy sector’s development.
Yates further noted the recent power supply challenges that the country has been experiencing, stating that the situation has “already cost Zambia dearly in terms of productivity, jobs and social development,” he said.
“The structure being adopted is one which will enable Zambian participation through the retention by IDC of a minimum of 20% shareholding in the two companies that are going to own the first two solar projects in Zambia,” Chipwende said.
Presently the IDC maintains a 100% ownership of the two solar projects; however it is reported that majority shareholding will be reduced by the two winning bidders assuming majority control in each company.