Update on the GET FiT Zambia programme in 2020 KfW, on behalf of the Ministry of Energy of the Republic of Zambia,…
About GET FiT
In addition to diversifying Zambia’s power mix, GET FiT Zambia aims to strengthen the Zambian power market by encouraging private sector participation from a wider range of developers, construction firms and financial institutions.
In partnership with Zambian stakeholders, GET FiT Zambia also strives to boost institutional capacity and stengthen the policy and regulatory framework for renewable energy IPPs in Zambia.
The initial phase of the GET FiT Zambia program was a tender for up to 100 MW of Solar PV capacity which was launched in February 2018. The REFiT Strategy also allocated 100 MW of capacity to hydro projects. GET FiT launched the Small Hydro tender in January 2019. Subsequent tenders could call for other technologies including biomass and geothermal.
Objectives of the Programme
- Timely procurement of 200 MW of renewable energy capacity (7% of the existing installed capacity in Zambia)
- Contributing to the diversification of Zambia’s power mix while ensuring projects are cost-reflective for Zambian end users
- Introducing standardized legal documentation for IPPs in Zambia
- Promoting competition and enhancing private sector participation in the Zambian power sector
- Improving regulatory and licensing procedures
- Introducing grid assessments to ensure that renewable energy procured by the Programme can be successfully integrated into the national grid
GET FiT Toolbox
GET FiT Zambia has developed a set of tools designed to help create an attractive environment for private investors and systematically support both the Zambian government and the utility, ZESCO, to meet the objective of providing affordable and stable power to the Zambian people. The components of the program are described below.
Competitive procurement of 100 MW of Solar PV & 100 MW Small Hydro
Mitigating liquidity risk through ATI’s Regional Liquidity Support Facility & financing support
Production-based top up for Hydro Projects determined through competitive bidding
Shallow and deep integration support of GET FiT projects & grid-related technical assistance
Procurement of tailored capacity building and TA programs for key sector stakeholders
Procurement & Transactions
The GET FiT Programme is tasked with the procurement of new renewable generation capacity. This included a 100 MW Solar PV tender, which concluded in April 2019, and a 100 MW Small Hydropower tender, which is still ongoing. Besides the procurement, GET FiT is providing associated transaction advisory for the implementation of the tender.
Debt & Risk Mitigation Facility
The Risk Mitigation Facility will be implemented in close collaboration with African Trade Insurance (ATI) as an option for developers and financiers. It combines ATI’s existing Termination Guarantee insurance with a new short-term liquidity product (Regional Liquidity Support Facility) which was jointly developed by ATI and KfW.
Viability Gap Funding
GET FiT offers performance-based tariff support for a limited portfolio of qualifying REFiT projects. In effect, viability gap funding facilitates the entry of early movers from the private sector into the nascent renewable energy market in Zambia. GET FiT Zambia has not applied viability gap funding toward solar PV projects.
The Grid Integration Component of the GET FiT Program consists of two different elements. GET FiT has provided advisory support to ZESCO regarding grid integration of solar PV into Zambia’s national grid. GET FiT will also provide financing for grid integration for select technologies, such as hydro.
GET FiT is providing capacity building programmes for key sector stakeholders as part of the Technical Assistance facility. Particular focus points of these programmes are project support for the small hydro portfolio, as well as grid integration of renewable energy into the Zambian grid.
GET FiT Secretariat
The GET FiT Programme has established a Secretariat, a key entity in the implementation of the Programme, serving as the main point of contact for all stakeholders of the Programme. Overall, the Secretariat provides comprehensive commercial, technical and administrative support in the effort to realize 200 MWs of small- to medium scale renewable projects. Among others, it is responsible for the implementation of the Technical Assistance programme.
The GET FiT Secretariat is located at the Energy Regulation Board (ERB) facilities in Lusaka and is managed by the Programme implementation consultant Multiconsult. Two full-time representatives are running the day-to-day management of the Secretariat.
The GET FiT Programme is executed by the Zambian Ministry of Energy, and implemented by the German development bank KfW. Programme funding is provided by the German government. In addition, a multitude of Zambian stakeholders is involved, such as ERB, ZESCO and OPPPI. Other cooperating international organizations include the African Development Bank, and Africa Trade Insurance.