Germany’s GETFit Zambia 120MW Solar PV Projects Still not Bankable

  • The GETFit Zambia annual update reports no progress made on getting 120MW of awarded solar PV projects bankable and over the line.
  • The hydro projects are in similiar limbo. 
  • Zambia’s sovereign debt and its associated understatement by the Zambian government was first raise by this publication in April 2018, prompting commentators to question why GETFit Zambia went ahead with their programme knowing full well that the projects will never be bankable with institutional investors
  • Zesco, Zambia’s state owned power utility has a total debt of USD 3.5 billion as at September 2021. Read more

Zambia’s Ministry of Energy (MoE) awarded six solar projects in April 2019 after a successful GET FiT Zambia tender process which secured a total of 120MW of Solar PV capacity at prices which would be highly beneficial to Zambia at the time.

‘Given the value that the Solar PV projects could re- present for the energy sector and the country, the Secretariat, together with the key Zambian stake- holders and KfW, has directed strong efforts to- ward the mitigation of risks and challenges causing the delays and enabling progress toward financial close. GET FiT Zambia also continued to work closely with the successful bidders, lenders, and other stakeholders to explore options that could impro- ve bankability and ensure the projects are back on track for successful implementation,’ the report states. Link to the full annual update HERE 

Earlier this month Zambian finance minister, Situmbeko Musokotwane, said Zambia’s external public debt had grown uncontrollably over the past decade to almost USD 15 billion by June this year. Of that, about $2 billion was parastatal debt. Read more

Related news: Reuters recently reported that Zambian debt with China alone could be could be twice official estimates. Read more

The GETFit Zambia hydro programme is in the same dire straits. The GET FiT Secretariat had planned to issue the RfP for the Small Hydropower (SHP) projects toward the end of first quarter of 2020. With the SHP programme also expected to be impacted by lenders suspending their funding activities for on-grid projects in Zambia,  the Government of Zambia through the GET FiT Zambia Secretariat has informed the pre-qualified developers that it is not deemed prudent to launch the RfP phase for this tender until the main challenges have been addressed. And nothing appears to have changed.

The latest report reads as follows: GET FiT Zambia has pre-qualified 30 developers of small hydropower projects, who were all eligible to apply for feasibility study rights (FSRs). A total of forty-four (44) FSRs were granted by the Ministry of Energy to 20 of these pre-qualified developers in 2020 and early 2021. The sites have capacities that vary between 1 to 20MW. The pre-qualified developers who holdfeasibility study rights will be invited to participate in the GET FiT Zambia Small Hydropower tender. A moratorium has been issued until mid Q3 2022 with the hope that a clear pathway can be found for the continuation of the Small Hydro Programme.’

Link to the full annual GETFit Zambia report HERE 

The GETFit programme is funded by the German tax payer.

Author: Bryan Groenendaal

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