Get Fit Zambia, which was designed to assist the Zambian government in the implementation of its Refit Strategy, on Friday announced that six solar photovoltaic (PV) independent power producer (IPP) projects, totalling 120 MW, have been awarded.
Get Fit Zambia aims to procure 200 MW of renewable energy projects within the next three years.
Of the six awarded projects, the lowest successful bid came in at $0.039/kWh, with the weighted average of all six projects being $0.044/kWh.
The projects include the 20 MW Bulemu East and Bulemu West projects submitted by a joint venture (JV) between Building Energy and Pele Energy at $0.039/kWh; the 20 MW Aurora Sola One and Two projects, submitted by a JV between Globeleq and Aurora Power Solutions, at $0.045/kWh; and the 20 MW Garneton North and South Solar projects, submitted by a JV between InnoVent and CEC at $0.048/kWh.
According to Get Fit, this is the largest single solar PV tender implemented in sub-Saharan Africa to date, outside of South Africa, and is the first time that a tariff below $0.04/kWh has been achieved through a public tender in sub-Saharan Africa.
The Get Fit tender had a target outcome of 100 MW, but owing to the favourable results, an additional 20 MW was awarded based on price and a total combined technical and financial score.
The tender represents the first phase of implementing the Zambian Government’s Refit Strategy, launched in 2017.
In addition to the awarded bidders, two consortiums have been awarded “Reserve” status, whereby Get Fit Zambia reserves the right to call upon these consortiums, each of which have also submitted bids for a total of 40 MW each, in the event that any of the awarded consortium are unable to either meet pre-established timeframes or meet compliance requirements.
Tender agent team leader Ryan Anderson highlighted that these tariff results represent a “truly competitive outcome”, adding that Get Fit Zambia has offered no form of grant financing, nor arranged for concessional finance.
KfW Development Bank’s Marco Freitag agreed, stating that the bankable standardised transaction agreements, the effective tender implementation and the commitment of the Zambian government and Zesco is what led to the competitive outcomes.
These results make a considerable contribution to Zambia’s efforts to expand access to affordable, reliable and clean power, while also diversifying the generation mix, Anderson said.
“The tender results are extraordinarily favourable for the Zambian people and Zesco, as they contribute to the ultimate goal of least cost power procurement,” Freitag emphasised.
The success status of the tender will only be achieved once all projects have been commissioned and are serving the Zambian national grid, with a key step to getting there comprising the signing of all power purchase agreements (PPAs), intergovernmental agreements with Zesco and the Zambian government.
In this regard, Get Fit Zambia commended the commitment of the Zambian government to put the power sector on a more sustainable footing through the implementation of a set of ambitious sector reforms that Cabinet has adopted in 2018.
According to Get Fit Zambia director Judy Raphael, the awards are in place and the projects will have to sign PPAs and achieve financial close.
In addition to this solar PV tender, Get Fit Zambia has already initiated its small hydro tender, with the results of the pre-qualification to be announced soon.
A process to allocate prefeasibility rights and a request for proposal during the course of 2019 will follow.