Zambia’s ambassador to Germany Anthony Mukwita says about 8 potential German investors are expected in the country in the next few weeks to explore investment opportunities in the energy sector. Ambassador Mukwita says the South Africa-German Chamber of Commerce and Industry Project Manager Markus Wolf has assured him that the investors will be coming following recent policy decisions by the Zambian government to remove energy subsidies.
“We expect between five to eight potential investors in the Germany energy sector to join us in Zambia in two months to seriously explore opportunities that are available in the Zambian energy sector,” Mr Wolf said.
According to a press statement released to the media by Kellys Kaunda, First Secretary for Press at the Zambia Embassy in German, Mr. Wolf made the disclosure to the Zambian ambassador in Germany Friday during an Information Workshop on investment opportunities in the Zambian energy sector organized by the GIZ, a German government international investment wing.
“Now you can see that the bold decision by President Edgar Lungu to scrap subsidies that kept tariffs in the energy sector artificially low is beginning to yield positive economic results as more and more foreign companies beat the investment path leading to Zambia”, ambassador Mukwita said. During his keynote address to the workshop, the Zambian envoy said the investment climate in the energy sector was now attractive following the removal of subsidies that had characterized the sector for over 40 years in Zambia.
In reference to this decision, Mr. Wolf told the Zambian envoy that “the high interest the Zambian energy sector was receiving” was due to the removal of tariffs that had suppressed prices thereby making investment in the sector unattractive, an apparent response to suggestions in some quarters that the interest may have been caused by what economists call a “bubble”, a sudden rush for an investment opportunity based on speculation.
Mr. Wolf was upbeat about the interest in the Zambian energy sector which he was optimistic would eventually translate in real investment and real partnerships between Zambian and Germany investors. On his part, the Zambian number one diplomat in the Federal Republic of Germany expressed even greater optimism saying “those that wantonly criticized President Lungu for phasing out subsidies now stood to be shamed”.
He said with the Zambian economy already on an upward growth trajectory, the removal of subsidies can only bring more and more growth in the country. The growth is spurred by development policies in the agricultural, tourism, mining, energy and other sectors.
“There is no country in the sub region that is more fertile for energy investment right now like Zambia,” Ambassador Mukwita said adding, “If the subsidies remained in place and tariffs remained artificially low, this German investment interest would not happen. The President made the right economic decision which will boost the economy in the long run.”
“You know it costs about US$1 million to build 1 megawatt of power so if only 26 percent of urban Zambians are electrified, the opportunities for further investment abound. The cost reflective tariffs will make Zambia a power exporter in our view,” said the Zambian diplomat.
Ambassador Mukwita said the Zambian embassy in Berlin will work hand in hand with the German Chamber of business in order to increase economic diplomacy adding that, “our political stability and peace continues to work for us as we woo investor.