Electricity Sector in Zambia

Sep 30, 2016 | Advisory Projects, Sub-Saharan Africa

“Zambia’s shortage of power generation capacity has been estimated at about 1000 MW. Without significant inflows into the dams in the short term the situation is likely to get worse.”

Electricity Sector in Zambia

Zambia has experienced daily 8-hour power-cuts since July 2015. Low water-levels at the main reservoirs for hydroelectric generation have led to a power deficit of about one-third of electricity demand. With the country’s historically sufficient power supply, the sudden crisis has exposed low diversification of the fuel mix and caught households and businesses unprepared and without alternative or back-up sources of electricity supply. Left without electricity many households have reverted to charcoal for cooking, causing a spike in prices and accelerating the rate of deforestation. While only 22% of the population has access to electricity, the entire population has been affected indirectly through negative impacts on the economy and public infrastructure services.

Zambia’s shortage of power generation capacity has been estimated at about 1000 MW (as at March 2016). The shortage is due to both economic and political constraints which are discussed in detail in this report. Without significant inflows into the dams in the short term the situation is likely to get worse, as demand is growing by around 200 MW annually without matching increases in supply.

Freedom to Create worked together with international experts, senior Zambian officials and private sector leaders to conduct “deep dive” research into electricity market pricing in Zambia. Our teams of experts made in-country study visits and conducted confidential interviews with a range of public and private stakeholders.

This report discusses the challenges that need to be addressed in order to provide a blueprint for possible options and avenues for addressing the long-term adequacy of Zambia’s electricity supply sector.