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Zambia’s Public-Private Partnership (PPP) model is regaining momentum as government and financial institutions collaborate to develop more commercially viable projects.
The framework, which saw its first major success with East Park Mall in 2009, slowed for years due to rigid structures and limited flexibility for project-specific needs.
Speaking during a panel discussion on public-private collaboration, Stanbic Bank Zambia Vice President for Energy and Infrastructure Investment Banking, Nkandu Machungwa, said early concession agreements were overly standardized, often ignoring the unique risks and financial realities of each transaction.
“Every transaction is different. Each has its own nuances and risks. Concessions should reflect that,” Machungwa explained.
He stated that: “Initially, it was difficult to secure changes, but we are now seeing more flexibility as engagements deepen.” Since 2021, reforms have re-energized Zambia’s PPP drive, with the Ministry of Finance’s PPP Division working alongside line ministries and private-sector players to revise agreements and improve commercial viability.
A key shift has been in risk allocation. Previously, risks were assigned to parties unable to manage them, creating execution challenges.
Current reforms emphasize early engagement with banks and investors to ensure risks are structured correctly, making projects more attractive to financiers.
Machungwa stressed that each PPP must stand on its own merits, as government guarantees are not part of the model.
He stated that this has encouraged earlier collaboration between project sponsors and financiers, embedding commercial sustainability into agreements from the outset.
“The flexibility we see now is making projects more bankable. With banks brought to the table earlier, we are confident more PPP transactions will soon come to market,” he said.
As Zambia continues refining its PPP approach, opportunities in infrastructure, energy, and urban development are expected to expand significantly.
During the same panel, Sheryll Byrne, Head of Project Finance at Standard Bank, said the bank was positioning itself at the center of Zambia’s evolving energy landscape by deploying new financing models and leveraging continental expertise to support the transition.
She revealed that in the past 12 months, Standard Bank, through its local subsidiary Stanbic Zambia, executed three major energy transactions worth more than US$250 million, underscoring strong confidence in Zambia’s potential to drive regional power innovation.
Across Africa, the bank deploys over 2,000 megawatts of power annually, giving it a unique vantage point in structuring financing solutions for diverse markets.
Traditionally, African power projects have relied on utility-backed Power Purchase Agreements (PPAs), where developers secure supply deals with state utilities such as ZESCO at fixed tariffs.
But these models have struggled due to non-cost-reflective pricing and legacy constraints, complicating fundraising.
Since 2020, private-sector power generation has surged as countries adopt open-access frameworks. Zambia has been a front-runner in this shift, opening the door for private players to help tackle its power shortages.
“Zambia has taken significant steps by enabling open access, and we expect to see strong activity in the next 12 months to help ease the current power crisis,” Byrne said.
Drawing from regional experience, she noted that innovative structures tested in South Africa and elsewhere could offer lessons for Zambia.
Byrne emphasized that Standard Bank’s approach is not about applying European “gold standards” but tailoring solutions to Africa’s realities. “You cannot apply a one-size-fits-all rulebook.
Each project is bespoke, requiring balanced risk allocation that satisfies clients, off-takers, and financiers alike,” she said. “Our role is to partner with stakeholders, understand the risks, and structure deals that deliver,” Byrne added.
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