Zambia is becoming one of Africa’s most attractive renewable energy markets for investors with new procurement mechanisms and market liberialization driving investment in large-scale solar and storage.

Dominic Goncalves, Advisory Partner for Energy Strategy at Cresco Project Finance and Founder & Director of Naviara Energy, told pv magazine there is “an unprecedented level of PPA activity in Zambia at the moment” as developers move to secure opportunities in what he describes as one of the continent’s fastest-evolving energy markets.

“Zambia isn’t simply procuring more solar,” he added. “It’s creating a market for dispatchable renewables, trading, aggregation, storage and innovative financing.”

Post-drought market drivers

Goncalves explained that a severe drought in 2023 to 2024 exposed Zambia’s deep reliance on hydropower, which still supplies more than 80% of the country’s electricity today. The drought caused extended periods of load shedding and forced many businesses onto diesel generation for well over ten hours a day during the peak. 

At the same time, improving economic conditions following Zambia’s sovereign debt restructuring have helped restore investor confidence. The country defaulted on its debt in 2020 but had its sovereign credit rating upgraded to a stable-to-positive outlook by last year and completed its IMF Extended Credit Facility earlier this year. 

“What’s happening now in Zambia is that for the first time, they’re putting together mechanisms in place that are addressing key bankability issues such as sovereign risk, creditworthiness and single buyer risk,” Goncalves said. “This is enabling solar-plus-storage projects that would previously not be considered viable and would have struggled to reach financial close to become bankable and viable.”

Among the new approaches is the Carbon Finance Procurement Facility, backed by the Norwegian government. Under the scheme, Norway purchases the carbon benefits generated by renewable energy projects, creating an additional revenue stream that improves project bankability and reduces investor risk. It launched earlier this year with a 300 MW solar tender for projects connected to on-site storage.

Future government procurements 

Zambia’s Ministry of Energy published a competitive procurement framework in May, which targets competitive bidding windows, standardized procurement documentation and regular tender rounds for renewable energy projects akin to South Africa’s REIPPPP which is now in its seventh bidding window.

While the Zambian government has proposed a first bidding window to take place before the end of the year, Goncalves expects it to materialize around mid-2027. Nevertheless, he believes the framework demonstrates the government’s willingness to encourage private investment.

“Public and private stakeholders in Zambia are currently aligned in trying to finance and unlock ‘the fastest MWs available’, supporting first movers in terms of solar-plus-storage to enable dispatchable renewables for energy security, and are open-minded in terms of finding solutions and mechanisms to unlock challenges and enable bankability,” he explained.

While work on government procurements gets underway, Goncalves said he expects privately-negotiated projects to continue moving ahead.

“The introduction of open access provides a significantly more flexible framework for buying, selling and wheeling electricity between market participants,” he said. “It will be interesting to observe the innovative solutions and deal-making that will emerge in this space over the next one to three years.”

ZAMWatt procurement program

Alongside the competitive procurement framework, Zambia is developing the ZAMWatt programme. The initiative is a public-private partnership between state utility ZESCO, Stanbic Bank and Africa GreenCo that will utilize Zambia’s new open access regulations to allow industrial customers to buy power directly from independent producers.

The procurement and energy-trading program is geared towards addressing concerns over the creditworthiness of ZESCO, which has stood as a longstanding barrier to renewable energy investment in the country. 

“What the ZAMWatt program is trying to do is pool IPP generators and pool offtakers,” Goncalves told pv magazine. “This derisks the whole approach of single buyer and single generator risks, because if there is payment default or generation default, you can replace within the aggregation pool.”

The program is expected to benefit large mining customers in particular, in areas such as Zambia’s rapidly-expanding copper industry. 

Goncalves said Zambia produced around 890,000 tons of copper last year, an amount expected to increase to 3 million tons by 2031.

“The amount of power they will need is huge and as there’s no gas in Zambia, limited new coal options and no nuclear, the only options they really have are solar, batteries and wind,” Goncalves explained. “As a landlocked country with some of the world’s largest critical minerals mines, they’re turning to solar-plus-storage for energy security and unlocking innovative models to deploy dispatchable renewables at scale.”

Regional example

Goncalves believes Zambia’s reforms could become a template for neighbouring markets with schemes similar to ZAMWatt anticipated in Zimbabwe and the Democratic Republic of the Congo.

Although implementation challenges remain, such as currency volatility and the need to expand transmission infrastructure, Goncalves said Zambia has established itself as a pioneer in the region.

“Zambia is definitely the first mover but the neighbouring markets are looking set to follow suit,” he said, mentioning Namibia and Botswana as examples of other Southern African countries on the way to liberalizing their energy markets.

Zambia’s installed solar capacity has grown significantly since the completion of its first 100 MW project in May 2025. Work began on a separate 100 MW array three months later, with both projects forming part of the government’s plan to deploy 1 GW of utility-scale solar. The country’s largest operational solar asset to date is the 136 MW Itimpi II solar plant, which was switched on in May.

Construction of Zambia’s largest solar-plus-storage project to date, a 250 MW solar site tied to 150 MW/600 MWh of storage, began in April.

The Africa Solar Industry Association (AFSIA) has tracked 1.15 GW of operational solar in Zambia, according to figures available in its project database. It adds a further 1.64 GW are currently under construction.