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 supply mix.
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 energy technologies.”
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 three months.
About IDC
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.
About IFC
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
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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
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