Lusaka, Zambia, July 21, 2015 – IFC,
a member of the World Bank Group, has signed a memorandum of understanding
with the Industrial Development Corporation of Zambia to explore development
of two 50 MW solar PV independent power projects in Zambia through the
Scaling Solar program. The projects would be Zambia’s first utility scale
PV projects, providing competitively priced, clean power that would reduce
Zambia’s dependence on hydro resources and diversify the country’s energy
Zambian President Edgar Chagwa Lungu has directed IDC Zambia to develop
at least 600 MW of solar power in the shortest possible time to address
the current power crisis. IDC Zambia anticipates that the first two projects,
with a combined initial target capacity of 100MW, will create the opportunity
for subsequent expansion and the rapid scale-up in renewable energy generating
capacity in Zambia.
President Lungu, who is also the Board Chair of IDC Zambia, said, “The
Zambian government is resolved to address the current hydro power shortages
caused by low rainfall through active promotion and increased use of renewable
Low rainfall over the past year has resulted in a national power generation
deficit of about 560 MW. Scheduled power outages are already having a negative
impact on homes and businesses.
The proposed projects would be situated on separate sites and developed
by different private sector sponsors, based on open and transparent selections.
It is expected that both projects would engage Zambian partners in
the ownership structure. The commercial structure is expected to follow
IFC’s recently-launched Scaling Solar initiative.
“IFC is developing this partnership with IDC Zambia to deliver affordable
renewable energy that can mitigate the country’s ongoing energy crisis.”
said Oumar Seydi, IFC Director for Eastern and Southern Africa. “The Scaling
Solar program enables us to apply the full range of World Bank Group services
to address Zambia’s challenges quickly and sustainably.”
IDC Zambia and IFC will seek to negotiate a formal advisory mandate within
the next few weeks, under which IFC will be appointed as lead transaction
advisor to IDC Zambia for the development of the projects. Once this
mandate is in place, project development will commence, with requests for
prequalification expected to be issued to prospective developers within
The Industrial Development Corporation of Zambia is domestic development
finance institution wholly owned by the Zambian government, incorporated
in early 2014. IDC Zambia’s mandate is to play a catalytic role in deepening
and supporting Zambia’s industrialization capacity to support job creation
and domestic wealth formation across key economic sectors. The IDC Zambia
plays its role through evaluation, pricing and lowering the investment
risk profile by serving as co-investor alongside private sector investors.
IDC Zambia facilitates provision and raising of long term finance for projects.
Simultaneously IDC Zambia serves as an investment holding company for state-owned
enterprises and new investments that ultimately generates earnings for
the proposed Zambia Sovereign Wealth Fund.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
Preliminary and unaudited data for the fiscal year ending Jun 30 indicate
that IFC’s long-term investments totaled about $17.6 billion, including
funds mobilized from other investors. That marked a 16 percent increase
over FY14. IFC made about $10.5 billion in long-term investments for its
own account and mobilized about $7 billion from other investors. These
investments supported more than 400 projects across the world. For more
information, visit www.ifc.org
About Scaling Solar
Scaling Solar is a World Bank Group solution that facilitates the rapid
development of privately owned utility-scale solar projects in sub-Saharan
Africa. Launched in 2015, the program builds on the World Bank Group’s
experience developing, procuring and financing solar power in emerging
economies, including in South Africa. It offers a one-stop-shop package
of advisory services, guarantees, financing and contracts that help governments
procure solar power transparently, competitively and with the lowest possible
tariffs. For more information, visit www.ifc.org/scalingsolar”