PV projects with a total of 100 MW capacity in Zambia have been awarded to two bidders – a joint team of First Solar and NEOEN S.A.S. for a power purchase agreement (PPA)of 6.02 cents per kWh and to Enel SA for 7.84 cents per kWh . The PPAs are said to be the lowest prices for solar power to date in the whole of Africa, according to the International Finance Corporation (IFC). The Zambian Industrial Development Corporation (IDC), had earlier this month indicated that NEOEN/First Solar and Enel Green Power S.P.A. of Italy could be the winners going by the low tariffs they had quoted (see Zambia PV Projects).
The projects are being developed under the program 'Scaling Solar' of IFC, a member of the World Bank Group. Scaling Solar is aimed at making privately funded grid-connected solar projects operational within two years and at competitive tariffs. The Zambia project tariffs are being hailed by IFC as 'among the lowest recorded anywhere in the world'.
The IDC had invited bids for two 50 MW each utility scale solar power projects in May 2016. A total of seven developers participated, NEOEN/First Solar and Enel won. Construction of the projects will complete in a year's time, increasing the country's generating capacity by 5%. The solar projects are also aimed at helping restore water levels in Zambia's dams.
The power tariffs will remain in force for 25 years, which means 4.7 cents per kWh over the life of the project. The solar power plants will be the country's first large-scale solar plants, saving over $7 billion for African consumers vis-à-vis oil based power which costs about 20 cents per kWh.
The IFC stated that Zambia has already committed to a second round of Scaling Solar tendering. At the same time, Senegal and Madagascar have also signed up for the same. The IFC is targeting to develop 1 GW of solar power in the next three years.
Philippe Le Houérou, IFC's CEO and EVP, said, "This is a tremendous result for
Zambia and for Scaling Solar, which has proved itself as a vehicle to open up new markets for clean energy. It is now possible for governments across sub-Saharan Africa to look first to solar power as a solution for inexpensive, quick-to-build power—something unimaginable outside of South Africa until now."