Zambia Renewable Energy Investment Framework (GCF-FP080)

Countries
  • Zambia
Where the impacts of the investment may be experienced.
Financial Institutions
  • Green Climate Fund (GCF)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Bank Risk Rating
U
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Feb 27, 2018
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Government of Zambia
The holder of the loan, grant, or other investment.
Sectors
  • Energy
  • Law and Government
  • Technical Cooperation
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Grant
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 52.50 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD)
$ 154.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Primary Source

Original disclosure @ GCF website

Updated in EWS Aug 9, 2018

Disclosed by Bank Feb 6, 2018


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Project Description

The Government of the Republic of Zambia (GRZ) aims at improving the conditions for renewable energy (RE) Independent Power Producer (IPPs) development and encouraging participation of private investors in the energy sector. The GETFiT (Global Energy Transfer Feed-in-Tariff) Zambia program, whose design has been supported by the KfW, aims to assist the GRZ in the implementation of its Renewable Energy Feed-in-Tariff (REFiT) Strategy officially launched in October 2017.

This framework targets to mobilize a financing package for upcoming RE IPP projects in Zambia identified under the GETFiT program, primarily for the first round 100MW solar PV (at least 80% of the framework). During the first phase, five to six small-scale (up to 20MW) solar PV projects will be selected through a competitive bidding process by Q2 2018 with the expected financial close by Q3 2018. It is targeted that most of them will be financed by the framework. The launch of the second phase will follow in mid-2018, which will procure total 100MW of small-hydro projects. The framework may finance a limited number of small-hydro projects from the second phase (i.e. up to 20% of the framework).

The Technical assistance (TA) will have two components:

  1. Assist the public sector (Ministry of Energy and Water Development, Rural Electrification Authority, etc.) to create enabling environment for private investments in the mini-grid and off-grid sector. Activities under this component will catalyze the market for decentralized energy solutions and directly contribute to national energy access, translating the experience of small-scale IPP (GETFiT projects) into RE-based rural electrification.
  2. Build the capacity of selected local commercial banks, institutional investors, and the Zambian financial industry for its enhanced understanding on renewable energy and infrastructure financing, renewable energy project screening, due diligence, and monitoring.
Investment Description
  • Green Climate Fund (GCF)

It is proposed that the AfDB will provide senior debt and standby loans to finance each of the selected and interested IPPs (the AfDB exposure to be limited up to one-Third (33.3%) of the total project cost – USD 50 million for the whole framework). The remaining debt will be financed by the GCF (through the AfDB as an Accredited Entity), a pool of commercial banks (backed by a standby loan) and the national pension fund managed by the Zambian National Pension Scheme Authority (NAPSA) (proposed). The GCF’s participation will be pari passu with the AfDB, therefore its total exposure including standard loans and standby loans will be equally limited to one-third (33.3%) of the total project cost.

In addition, Technical assistance (TA) grants of up to USD 4 million, from the GCF and the AfDB, will be provided.

Contact Information
<p dir="ltr">Contact: Ousseynou Nakoulima, Director for Renewable Energy and Energy Efficiency - Namho Oh, Investment Officer<br />Organization: African Development Bank<br />Email: <a href="mailto:o.nakoulima@afdb.org">o.nakoulima@afdb.org</a>&nbsp;/&nbsp;<a href="mailto:n.oh@afdb.org">n.oh@afdb.org</a>&nbsp;<br />Tel: +225 20 26 40 35<br />Address: Avenue Joseph Anoma, 01 BP 1387 Abidjan 01, C&ocirc;te d'Ivoire</p> <p dir="ltr"><strong>ACCOUNTABILITY MECHANISM OF GREEN CLIMATE FUND</strong></p> <p dir="ltr">The Independent Redress Mechanism (IRM) is the independent complaint mechanism for a person or people who have been or believe they are likely to be adversely affected by a project or programme funded by the Green Climate Fund. If you submit a complaint to the IRM, it may seek to address the issues raised by facilitating a problem-solving dialogue or, if that is not possible, conducting an independent investigation into whether the <span class="il">GCF</span> has complied with its environmental and social policies.&nbsp; The IRM is newly created and is still in the process of developing its procedures and website.&nbsp; More information about the IRM and how you can file a complaint is forthcoming. You can contact the IRM at <a href="mailto:irm@gcfund.org" target="_blank" rel="noopener">irm@gcfund.org</a>.</p>