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The current power deficits in Zambia and the Southern Africa region presents a huge opportunity for the banking sector to make an impact and contribute to the growth of the energy sector.
This could be done by hastening the financial support towards the growing energy industry, according to Lunsemfwa Hydro Power Company Chief Executive Officer, Alpha Mwale.
Mwale encouraged the banking sector to begin to recognise the electricity service industry as a bankable market.
He said this at the Southern African Power Pool (SAPP) event in Lusaka on Thursday.
“If the finance industry cannot catch up and begin to recognise this market as a bankable market, what will happen is that the sector itself will begin to develop slowly, we will begin to use our own cash to develop bit by bit and we will get bigger.
“What will that do, is slow down progress. But if you can come on board and work with the current market structure, we think that a lot of projects can be unlocked,” Mwale said.
He also stated that the current model of financing electricity projects based on Power Purchase Agreements (PPA) as a form of security maybe overtaken by the growing demand for electricity.
“Where the industry is going now, the PPA is good, but it can also be a prison because it can lock you from exploring other opportunities. We think that the SAPP market, is enough to guarantee the market for power.
“In this power deficit, there should be no doubt that if you produce power, somebody will buy it. We think that the emphasis on PPA was at a time when you could produce power and get stranded with it,” Mwale said.
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