GETFit Zambia 120MW Solar Programme: Projects Are Not Bankable

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  • Zambia’s macroeconomic situation and the energy sector’s challenges had deteriorated since the launch of the Request for Proposal (RfP) in August 2018, and by early 2020 had resulted in challenges for the 120MW Solar PV projects to progress toward financial close explains GETFit in a recent project update.

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.

Zesco, Zambia’s state owned power utility has a total debt of USD 3.5 billion as at September 2021. Read more

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

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.

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.

The people at GETFit Zambia are however, still hopeful. “The Programme Secretariat continues to make all efforts possible, including regular contact with potential financiers, the project developers, and sector institutions, aiming to address the challenges and ensure progress toward financial close,” they conclude.

The GETFit programme is funded by the German tax payer.

Author: Bryan Groenendaal


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