Friday, March 29, 2024

Zambia closes in on Delivery of 100 Mega Watts Solar Energy, French Company chosen as the preferred bidder

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Finance Minister Felix Mutati (R)
Finance Minister Felix Mutati (R)

The Zambian Government and Neoen S.A.S of France, the preferred bidder under the Scaling-Up Solar Project, have completed negotiations on taxation, land provision, and equity financing. The conclusion of the negotiations paved way for signing of a Power Purchase Agreement [PPA] between Neoen S.A.S and Zesco Limited last Friday.

Neoen S.A.S, a leading French Company in renewable energy, will construct a 100 Mega Watt Solar Power Plant from the planned 500 Mega Watts under the Scaling-Up Solar Project.

Speaking during a bilateral meeting with the French Minister for Development Jean-Marie Le Guen in Lusaka, Finance Minister Felix Mutati said “this is a great development in our resolution of the power supply challenges,” and added that “the finalization of the PPA sets solid ground for reaching financial closure on the project that is now expected to be achieved by the end April 2017.”

An elated Mutati further stated that “the negotiations have been tough but through joint determination to succeed and inject 100MW in the main grid by end of this year, we have come to a mutually beneficial agreement,” and, he said, “the people will be greatest beneficiaries as it will contribute significantly in mitigating power supply challenges in the country.”

“This milestone is a practical fulfillment of President Edgar Lungu’s directive to diversify sources of power supply and to provide solutions in the short to medium term that will overcome load shedding” Zambia’s Minister of Finance said.

Meanwhile, Mr. Le Guen has described the Neone/IDC deal as the best in the world as it has attracted a lot of interest in France, wider Europe and the rest of the developed international community.

Mr. Le Guen pledged the support of France in constructing the Batoka Gorge.

President Lungu launched the first round of the Scaling Solar Project targeting 100MW on 7th May 2016 at the project site in the Lusaka South Multi Economic Zone (LS-MFEZ).

During that event, the President had directed that development of up to 500MW of solar power sources be actualised in the immediate term. Following that directive, the Government floated a competitive tender for development of a 100 MW plant after which Neoen was awarded the tender at a tariff of 6.02¢/kWh, fixed for 25 years. The 100 MW is expected to on the grid in the third quarter of 2017.

The development is being carried out under a special purpose vehicle called Bangweulu Power Company, owned 80 percent by Neoen S.A.S of France and 20 percent by IDC of Zambia. The IDC has now proceeded to issue a call for bids for the balance of 400 MW.

Zambia under the World Bank Group’s Scaling Solar Project embarked on an open, competitive and transparent procurement process for the rapid development of privately owned, utility scale solar PV projects in sub-Saharan Africa.

Through the Scaling Solar initiative, the International Finance Corporation [IFC] offers a one-stop-shop solution and package of advisory services, template contracts, financing, guarantees and insurance, drawn from across the World Bank Group to help Government’s and utilities procure solar power transparently, competitively and at the lowest possible cost.

16 COMMENTS

  1. Nice to see a SOLAR power company pledging FRANCE to support a HYDRO ELECTRIC SCHEME.
    Thats like SHOPRITE pledging SOUTH AFRICA to a project.
    More boastful rhetoric.Do LT read what they write.How many LT journalists got overseas postings

  2. What will the cost to the end user…..us…….
    China gets 60% of ZNBC Now France gets 80% of ajoint venture.
    Thought the negotiations were tough….

    • The “one stop shop” program aims to make privately funded grid-connected solar projects operational within two years and at competitive tariffs.

    • So Zesco will buying from private energy suppliers at loss as tariffs are not cost reflective unless ZRA is offering tax waivers!!

  3. I LOVE FRANCE AND THE FRENCH COMPANIES. THE FRENCH ARE HONEST AND WHEN THEY HATE OR LOVE YOU THEY OPENLY AND TRANSPARENTLY SAY SO. THIS IS UNLIKE OTHER COUNTRIES IN THE WEST WHO MAY PRETEND AND SAY THEY LIKE YOU BUT START STUBBING YOU AT YOUR BACK. PLEASE, ENCOURAGE MORE FRENCH COMPANIES TO INVEST IN ZAMBIA THOUGH JOINING OTHER ALREADY ZAMBIAN-OWNED SIMILAR COMPANIES WOULD BE THE BEST FOR ZAMBIA. THE DOMINATION OF CHINA IN ZAMBIA TO SOME EXTENT MUST BE DEFUSED FOR THE SAKE OF HIGH STANDARDS AND QUALITY PRODUCTS AND SERVICES. KUDOS.

    • Hehehe, so much for liking French companies aaai? Did you ever buy Lagarge Cement before Dangote came on the market? Baba we suffered. On principle, I would never ever buy Lafarge products.

    • I doubt you know anything about France or its history…if you did you wouldn’t posted that don’t know all the former French colonies have to bank a large chunk of their reserves in the French Tresuary..any African leader who has tried to raise any has been kicked out via French backed coup.
      Wake up!!

  4. Peter, my experience is that Russians are more sincere. When they “like” its to the bitter end. Lets wait and see . All of them under a white skin.

  5. Tell them Jay, I see some cadres are happy but what they don’t know is 100 mega watts is a drop in a bucket, considering we consume more 50,000 mega watts. This scaling up solar project is part of the world bank, I don’t think anything good can come from something associated with the World Bank and their enslavement agenda.

    • That’s because they have been promised cost reflective tariffs by Mutati in exchange for loans…100MW is not a drop in the ocean its enough more over for domestic households in one district.

  6. UMMMMM ba China inwe. I am yet to know which country in Africa cosumes 50,000 MW. Not even RSA or Nigeria.

  7. @economist with a tag like that i would have expected a comment on the relevant econimic benefits and cost to the population
    But you are entitled to blog on whatever you want.. maybe the bit about LT journalists upset you my sensitive economic genius

  8. The Scaling Solar award was 2 x 50MW. Neoen was awarded 50MW and ENEL 50MW. How did this change to Neoen getting all 100MW? Something funny is going on. It is not transparent at all and why is a French government official involved? The whole thing needs to be investigated. What is the tax deal? How come this wasnt in the tender to make it fair? Something stinks.

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