The consortium was awarded the project by Zambia’s Industrial Development Corporation (IDC) at a ground breaking tariff of $0.06 per kilowatt-hour (kWh), the lowest seen in sub-Saharan Africa to date.
The IDC had opened bids from seven leading renewable energy developers seeking to build large-scale solar power plants in the southern African country where power shortages are acute.
Neoen contracted to 25-year PPA
The 47.5MW project is scheduled for completion by mid-2017 with the facility located in the Lusaka South Multi-Facility Economic Zone.
The energy generated by the facility will be supplied to ZESCO, the state-owned utility company, under a 25-year Power Purchase Agreement (PPA). The IDC, an investments holding company wholly owned by the Zambian government, will retain a 20% stake in the project.
The power plant will cover an area of almost 129 acres, equal to approximately 73 soccer pitches, and will displace the need for 125 million litres of water that would have been consumed by conventional generation.
The solar PV plant will be powered by approximately 450,000 high performance solar modules, which offer up to 6% more energy than conventional crystalline silicon PV panels. The higher efficiency is apparently driven by the modules’ ‘superior’ temperature coefficient, which translates into higher energy yields in warm climates, and their spectral response, which allows them to generate more energy than conventional crystalline silicon panels, in humid conditions.
Low tariff won’t affect quality
Nasim Khan, First Solar’s vice president of business development for Africa, said: “.. this project shatters the misperception that low cost energy cannot be delivered with high quality, high performance modules.”
[quote]The IFC, a member of the World Bank Group, acted as lead transaction advisor to the Government of Zambia and helped run the tender process for the two projects, which started in October 2015.
The IDC was very pleased with the level of competition, stating that the lowest tariff, which will remain fixed for 25 years, is believed to be the lowest in sub-Saharan Africa.
Next steps for the Scaling Solar programme
Round 2 of the Scaling Solar programme, with a target capacity of a further 200MW, has recently been launched by Zambia’s president, Edgar Chagwa Lungu.
Work has already commenced on a high-level study of the national grid to determine the optimal location and size of these and other future solar PV projects.
“IDC is delighted with the high level of competition and the quality of bidders that Scaling Solar has delivered,” said Andrew Chipwende, chief executive officer of the IDC.
“To get from His Excellency the President’s initial procurement directive to the opening of financial proposals in ten months has only been possible through the adoption of the Scaling Solar model, which brought together all the necessary public sector stakeholders, led by the Ministry of Finance, as well as the various members of the World Bank Group.”
“Solar power has enormous potential to help African countries meet their energy needs,” said Dan Croft, Senior Investment Officer for IFC’s PPP Transaction Advisory Services team.
“The experience here in Zambia has proved the effectiveness of Scaling Solar to help countries add solar power to their energy mix quickly and affordably. We look forward to delivering similar results in Senegal, Madagascar and any other countries that sign up with Scaling Solar.”