Zambia is currently navigating one of its most severe energy crises since independence—driven largely by prolonged droughts due to climate change and an overreliance on hydropower.
These challenges have exposed deep structural vulnerabilities in the country’s electricity supply system.
In response, Zambia has embarked on ambitious reforms aimed at liberalizing the energy market, attracting private sector investment, and diversifying energy sources.
At the heart of these reforms lie two transformative pillars: regulated open access to the power grid and the promotion of power trading as both a short-term relief measure and a long-term strategy.
Building Investor Confidence in a Capital-Intensive Sector
The energy sector demands substantial capital investment. Before committing funds, investors rigorously evaluate sovereign risks and carefully scrutinize the profiles of Independent Power Producers (IPPs) and traders.
Any negative political commentary or public backlash can undermine investor confidence, potentially derailing crucial financing efforts.
Reckless or politically charged statements not only harm the credibility of individual companies but can also obstruct Zambia’s broader goal of achieving universal energy access.
A recent success story illustrates this clearly. With support from the power trader GreenCo, ZESCO was able to structure a transaction that raised $70 million to develop a 100 MW solar power plant.
Without GreenCo’s involvement, this deal wouldn’t have materialized. Imagine the impact if damaging rumors or political attacks against the company had surfaced just days earlier—the funding would likely have fallen through.
As President of the Economics Association of Zambia (EAZ), I lobbied for the implementation of open access so that any licensed power producer could use existing transmission infrastructure to sell electricity—either within Zambia or across borders.
This model, widely adopted in other countries, has the potential to unlock a dynamic new industry that ultimately benefits the consumer.
However, I continue to hear concerns from international stakeholders about Zambia’s political and investment climate—concerns that are often avoidable.
It is crucial that we nurture an environment of stability, professionalism, and partnership to inspire confidence in our energy sector.
What is Power Trading?
Power trading involves the buying and selling of electricity among producers, suppliers, and consumers—both domestically and internationally. It enables efficient use of generation capacity, strengthens grid reliability, and fosters a competitive environment that spurs innovation and investment.
Private power trading, in particular, allows IPPs, power traders, and private utilities to engage directly in the electricity market.
Read more: Jay Rox, Tim reignite zone fam nostalgia with ‘Mfumu (Amen)’ collaboration
Forms of Private Power Trading
Bilateral Power Sales – Direct Power Purchase Agreements (PPAs) with large consumers like mining companies.
Wheeling and Open Access – Use of public infrastructure to transmit electricity to third-party buyers.
Retail Power Supply – Direct sale of electricity to end-users in deregulated markets.
Cross-Border Private Trade – Exporting and importing electricity under regional trading arrangements.
Zambia’s Journey Toward Energy Sector Reform
From Monopoly to Market Liberalization
1994: Introduction of the National Energy Policy, initiating market reforms.
1995: Enactment of the Energy Regulation Act and Electricity Act.
1997: Formation of the Energy Regulation Board (ERB) to oversee the sector.
These steps marked the beginning of ZESCO’s monopoly being dismantled, enabling private participation. The Copperbelt Energy Corporation (CEC) emerged as a major player, supplying power primarily to the mining sector.
Legal and Regulatory Milestones
2019: The Electricity Act No. 11 and Energy Regulation Act No. 12 introduced:
Legal provision for open access to the national grid.
Licensing of multiple entities for generation, transmission, and distribution.
2024: Electricity (Open Access) Regulations implemented:
Enabled large power consumers to directly procure electricity from IPPs and traders.
Strategic Importance of Power Trading Amidst Crisis
In 2024, structured imports and private procurement helped:
Alleviate load-shedding.
Reduce pressure on ZESCO’s strained infrastructure.
Maintain supply to critical sectors like hospitals, schools, and households.
Power trading has become a central element of Zambia’s energy security.
Ensuring Balance in a Liberalized Market
Reforms must not compromise the health of ZESCO, which remains vital to grid operation.
Key safeguards include:
Regulated wheeling charges to ensure infrastructure sustainability.
Coordinated imports to prevent market fragmentation.
Fair allocation of power between public and private actors to avoid distortion.
The Urgency of Energy Diversification
Zambia’s overdependence on hydropower has become a major vulnerability.
Transitioning to a diversified energy mix—including solar, thermal, wind, and regional imports—is not optional; it is essential.
Power trading accelerates this shift by integrating new suppliers into the grid.
Key Energy Players in Zambia
Africa Energy Trading Group Holdings Corp – Cross-border and local power trading for large consumers.
Africa GreenCo (GreenCo Power Services Ltd) – Aggregates power from IPPs and sells to large buyers; active in SAPP.
Copperbelt Energy Corporation (CEC) – Supplies power to mines; licensed for regional trade, including with DRC.
EnPower Trading Ltd – New entrant supporting bilateral deals and regional trading.
Kanona Power Co. Ltd – Focused on large-scale power infrastructure, especially for mining.
Lunsemfwa Hydro Power Co. Ltd (LHPC) – Operates hydro plants; exploring direct sales under open access.
Maamba Collieries Ltd (Maamba Energy) – Runs Zambia’s largest thermal plant; a key stability provider.
Ndola Energy Co. Ltd (NECL) – Heavy fuel-based producer with long-term PPAs with ZESCO.
North Western Energy Corp (NWEC) – Distributes power in North-Western Province; considering alternative sourcing.
Petrodex Trading LLC – International trader licensed in Zambia; facilitates cross-border transactions.
ZESCO Ltd – The national utility and largest energy trader; major player in SAPP with generation, transmission, and import/export roles.
African Leaders in Private Power Trading
CEC (Zambia) – Cross-border trade and mine supply.
Globeleq (Pan-Africa) – Over 1,500 MW in generation capacity.
PowerX (South Africa) – Renewable energy aggregator and seller.
Symbion Power, AMEA Power, Enel Green Power – Investing across Africa in renewables and trading infrastructure.
Emerging Trends in Zambia’s Power Market.
Rise of merchant plants selling directly to large consumers.
Growth in private wheeling, especially in mining and industrial sectors.
Expansion of cross-border mini-grids and energy-as-a-service models for rural and border communities.
Oversight and Governance
The Energy Regulation Board (ERB) plays a critical oversight role:
Licensing market participants.
Approving tariffs and wheeling fees.
Ensuring access to infrastructure.
Mediating disputes and promoting public interest.
Supporting ZESCO’s operational and financial health.
A Call for Zambian Leadership in the Energy Transition
Zambia’s liberalized energy market must be led by Zambians. Key opportunities include:
Developing rural solar mini-grids.
Engaging in regional power trading.
Supplying power to commercial and industrial users.
Zambians must move from being passive consumers to active producers, developers, and innovators in the energy space.
The Road Ahead: Shared Responsibility and National Unity
A successful energy transition requires harmony between public and private players. Risks to avoid:
Tarnishing reputations of key actors.
Political interference and misinformation that erode investor confidence.
Mismanagement that fuels sovereign risk.
The energy sector must be recognized as a cornerstone of Zambia’s development—supporting job creation, economic growth, and social inclusion.
Conclusion: Seizing the Opportunity
Zambia’s energy future depends on sustained reforms, active support for open access and power trading, and a robust diversification agenda. These are not mere strategies—they are vital to national survival and prosperity.
It is time for Zambians to lead the next chapter of the energy revolution.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments