The state Industrial Development Corporation (IDC) is requesting submissions from companies looking to prequalify for a programme to bring online at least 600MW of solar power in the country. The IDC is aiming to rapidly develop two 50MW solar photovoltaic projects as 25-year independent power projects, and plans to take a minority stake. 

Both projects are expected to be developed in the Lusaka South Multi-Facility Economic Zone, and the selected companies willdevelop, finance, construct, own and operate the facilities. A request for prequalification was issued on 5 October. A pre-bid meeting will take place on 23 October at the Taj Pamodzi Hotel, and submissions are due by 13 November. Prequalified companies will be given access to a data room and permitted to undertake site visits before responding to the request for proposals (RfP).

The work is taking place under the Scaling Solar Zambia project, supported by the World Bank, and the International Finance Corporation (IFC) is acting as the lead transaction adviser. The means that the projects will be structured in line with the World Bank’s Scaling Solar initiative, a ‘one-stop-shop’ package including advisory services, contracts, financing, guarantees and insurance which is designed to allow solar power to be developed quickly and transparently. 

The World Bank has developed a suite of project agreements, including a power purchase agreement and government support agreement, which have been designed to make financing simple and effectively allocate risk and are non-negotiable. Under the Scaling Solar initiative, RfPs include term sheets which provide indicative terms for IFC limited recourse financing, political risk insurance from the Multilateral Investment Guarantee Agency and partial risk guarantees from the International Development Agency, although bidders are not obliged to use these products.

As in the rest of Southern Africa, Zambia has low water levels at its dams, constraining electricity generation as hydroelectric power plants account for more than 90% of installed capacity (AE 307/12). The IDC was incorporated in January 2014 with Zambia’s president as its chair, and is intended to be the holding company for 33 state-owned enterprises on behalf of the government. The process of transferring 29 of these to the corporation, including national utility Zesco, was completed on 10 September 2015.