Zesco Signs Deal With China’s CiEG To Produce $3.5 Billion Worth Of Renewable Energy

State-owned power utility Zesco has signed a Power Purchase Agreement (PPA) with China’s Integrated Clean Energy Power Company Ltd (CiEG) for renewable energy production.

Zesco is the country’s largest power company, powering about 80% of the nation’s electricity consumption. The company signed the PPA as part of the country’s efforts to tackle to energy shortages it has been facing in recent years.

The pledged investment of the CiEG, a subsidiary of China Huadian Corporation, is to produce 2,400MW of renewable energy in a deal estimated to be worth $3.5 billion.

Zambia’s energy minister, Peter Kapala, shared in a statement released on his Facebook page on Monday that the pledged investment will be “rolled out in phases of 600-800MW over a 3-year period in four provinces”. This phased approach will start this year with 300MW in Southern Province and 300MW in Central Province.

This follows Zesco’s announcement in January of another foreign energy investment from the Abu Dhabi energy company, Masdar, of $2.5 billion in 2GW.

These foreign direct investments are a very welcome boost to Zambia’s energy capacity. Zambians have experienced frequent power outages – partly as a result of the country’s reliance on hydropower, which has been badly affected by recent disrupted rainfall. Especially damaging has been the critically low water levels in the Kariba Dam, which is central to Zambia’s hydropower energy output.

The additional power supply is expected to help improve employment opportunities, contribute to the country’s growing economy, and generally improve living standards for Zambians.