Zambia’s Industrial Development Corporation (IDC) has opened bids from seven renewable energy developers seeking to build large-scale solar power plants in the southern African country where power shortages are acute. The bid tariffs have ranged from US$6.02 ¢/kWh to 10.6¢ / kWh at the low end.
The proposals, initially submitted on May 6, relate to the development of two utility-scale solar power projects of up to 50 MW each. These would be the first large-scale solar IPPs in the country and the inaugural projects for the World Bank Group’s Scaling Solar program. IFC, a member of the World Bank Group, acted as lead transaction advisor to the Government of Zambia and since October 2015 have helped run the tender process for the two projects.
The tender initially attracted 48 developers, of which 11 were prequalified for the subsequent bidding process. Seven bidders submitted final proposals. These were:
Winners for the two projects will be selected on the basis of the lowest proposed tariff. Provisional results indicate that NEOEN S.A.S. / First Solar Inc. and Enel Green Power S.p.A. will win the two projects at tariffs of 6.02¢ / kWh and 7.84¢ / kWh respectively. These proposed tariffs will remain fixed for 25 years. However, an official announcement will be made at that time.
Local Zambian participation in the two projects will be ensured through IDC taking a 20 percent shareholding in each of the two project companies.
IDC Chief Executive Andrew Chipwende, said:
“IDC is delighted with the high level of competition and the quality of bidders that Scaling Solar has delivered. To get from His Excellency the President’s initial procurement directive to the opening of financial proposals in ten months has only been possible through the adoption of the Scaling Solar model, which brought together all the necessary public sector stakeholders, led by the Ministry of Finance, as well as the various members of the World Bank Group.”
Dan Croft, Senior Investment Officer for IFC’s PPP Transaction Advisory Services team, said:
“The experience in Zambia has proven the effectiveness of Scaling Solar to help countries add solar power to their energy mix quickly and affordably. We look forward to delivering similar results in Senegal, Madagascar and other countries.”