1. KACHINGA-WANKUNDA PHIRI
PRINCIPAL ECONOMIST
FIXING OUR POWER CRISI: POLICIES,
PARTNERSHIPS AND INVESTMENTS
Date: 28th October 2016

2. TABLE OF CONTENTS
1. SECTOR REFORMS
2. INDUSTRY STRUCTURE
3. INSTALLED CAPACITY
4. CONSUMPTION
5. DEFINING THE CRISIS
6. RESPONSES – A
UTILITY’S PERSPECTIVE

3. SECTOR REFORMS
1970
• Zambia Electricity Supply Act was passed
• Act brought together the electricity undertakings previously managed by the local authorities to form Zambia Electricity
Supply Corporation Limited
1991
• Election of a new Party, the MMD
• New Government shifts economic focus from central planning to private sector driven leading to privatization and
structural reforms
1994
• Promulgation of new electricity Act.
• Policy objective was to optimize supply & usage, facilitate economic development & maintain safety and health
standards.
1995
• Repeal of the ZESCO Act and promulgation of the Electricity Act
• Promulgation of the ERB Act setting up the new sector Regulator
2008
• Promulgation of 2nd Energy Policy with a goal to create conditions that will ensure the availability of adequate supply of
energy from various sources, at the lowest economic, financial, social and environmental cost consistent with national
development goals

4. INDUSTRY STRUCTURE

5. NATIONAL INSTALLED CAPACITY
• Installed generation
capacity of 2.754 GW in
2016
• ZESCO installed capacity of
1.868GW
• IPPs account for 0.886GW
• ITPC is a JV between
ZESCO and TATA Africa
• KNBE is a 100% subsidiary
of ZESCO
Kafue George, 990
Kariba North, 720
Diesels, 7 Victoria Falls, 108
Mini-Hydros, 43
KNBE, 360
ITPC, 120
Maamba, 300
Ndola
Energy, 50
LHPC, 56
IPPs, 886
Kafue George Kariba North Diesels Victoria Falls Mini-Hydros
KNBE ITPC Maamba Ndola Energy LHPC

6. CONSUMPTION AND ENERGY OUTPUT
Kafue George,
4,413,730
Kariba North,
2,163,326
KNBE, 455,247
Victoria Falls,
632,470
ITPC, 394,262
Mini-Hydros,
107,917 Diesels, 15,945
Energy (MW) Jan-Sept 2016
Kafue George Kariba North KNBE Victoria Falls
ITPC Mini-Hydros Diesels
8,183 GWh
65,881
183,659
48,020
375,549
71,454
5,526
77,925
23,052
395,944
2,729,904
4,414,352
OTHERS
AGRICULTURE
QUARRIES
MANUFACTURING
ENERGY AND WATER
CONSTUCTION
TRADE
TRANSPORT
FINANCE AND PROPERTY
SERVICES
MINING
- 500,000 1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000
SECTOR CONSUMPTION (MWh), JAN-SPET 2016
SECTOR CONSUMPTION

7. Defining the Power Crisis
Supply
Capacity
Power
Demand
Inadequate Supply Capacity Supply Quality
• Low/fluctuating
voltage
• Intermittency of
power supply
Low Access Rates
• Current national
access rates are
below 30%
• Urban access are
below 50%
• Rural rates are below
5%

8. Is it an Energy or Power Crisis?
2016 2017 2018 2019 2020 2021 2022
Supply (GWh) 12,773 14,894 21,018 21,018 22,118 22,118 34,476
Demand (GWh) 16,764 18,314 19,117 19,944 20,721 21,185 22,021
Energy satiation to
normalize after 2
good rainy seasons
New Energy from
KGL, BGHES and LRB
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Energy(GWh)
Energy Load Forecast, 2016-2022
2016 2017 2018 2019 2020 2021 2022
Supply (MW) 2,744 2,919 3,366 3,366 3,613 3,613 5,911
Demand (MW) 1,916 2,091 2,182 2,277 2,365 2,418 2,514
Capacity is not the
constraint
Commissioning of
KGL, BGHES and LRB
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Capacity(MW)
Capacity Load Forecast, 2016-2022

9. ZESCO’S RESPONSE – SUPPLY AND POWER
QUALITY CONCERNS

10. Short Term – Power Imports and New Projects
Power Imports
• ZESCO plans to import 3,640GWh of emergency energy
from the region in 2016
• Total cost of US$ 470m for emergency power imports.
• The average unit cost of these purchases will be USc
12.90/kWh.
• The average retail price is Usc 4.98/kWh
• Difference of Usc 7.92/kWh is a cost to ZESCO that
needs to be covered.
Commissioning of Projects
• Completed PRP in 2012 at a total cost of US$338
million. Project added 210MW of GX and increased TX
and DX capacity
• Commissioned 360MW KNBE in 2014
• Commissioned the 330kV Pensulo-Kasama & Pensulo-
Chipata TX Lines in 2015 and 2016
• ZESCO commissioned the 120MW Itezhi Tezhi Power
Station in February 2016
• Maamba commissioned the 1st 150MW unit from its
300MW Facility in August 2016
• Commissioned the connection of Mwinilunga to the
national grid in September 2016

11. Medium to Long Term – Projects and Partnerships
Projects
• Investment of estimated US$ 8.98 billion in new GX, TX
and DX capacity going into 2022
• 3,411MW of new capacity at an estimated cost of
US$ 6.5 billion
• 4,740MVA in new transmission capacity at a total cost
of US$ 1.73 billion
• Rehabilitation, uprating and development of new
distribution capacity at a cost of US$ 746 million
Partnerships
• New PPA with Ndola Energy for additional 55MW in
2017
• Renewed PPA with LHPC for 56MW
• Commissioning of 150MW by MCL in 2016/2017
• PPA for 340MW from EMCO in 2018
• PPA for 100MW from IDC Scaling Solar in 2017
• Negotiating PPA with LPA for 247MW expected in 2020
• Expected off-take of 250MW from REFiT/GETFiT
program in 2017/18

12. INVESTMENTS – Generation
Generation Projects Capacity MW
Planned Project
Duration
Cost (US$m) Project Status
% Of Work
Done
Lunzua 15 2 years 52 Completed 100%
Musonda Falls 10 2 years 42 Implementation phase in progress. 65%
Itezhi Tezhi 120 4 years 243 Completed 100%
Lusiwasi Upper 15 1.5 years 46
Project about to move to Implementation
stage. CPs not yet settled.
0%
Lusiwasi Lower 86 2 years 164
Project about to move to Implementation
stage.
0%
Chishimba Falls 15 TBA 42 Procurement of main consultant underway 0%
Kafue Gorge Lower Hydro Scheme 750 4 years 2,000 Implementation phase in progress. 5%
Luapula River Hydro scheme 1,200 TBA TBA
Project feasibility studies about to
commernce
0%
Batoka Gorge Hydropower project 2,400 TBA 4,000 Project at feasibility study stage 0%
Total 3,411 6,588

13. Transmission Projects
Planned Project
Duration
Contract Sum
(Us$M)
% Of Work Done
ZIZABONA 330kv Interconnector Tba 59 0%
ITT-Mumbwa-Lusaka West 220kv Transmission Line Project 2 Years 133 100%
Connection Of Luangwa To The National Grid Tba 63 51%
Kafue Town- Muzuma-Livingstone 220kv Transmission Line Upgrade Project 2 Years 100 50%
Chipata-Lundazi-Chama 132kv Transmission Line Project -Transmission Lines 1 Year 69 0%
Electrification Of Vubwi And Reinforcement Of Supply To Eastern Province Tba Tba 0%
Lusaka South MFEZ Transmission Project 2 Years 33 60%
Kasama – Nakonde Transmission Project 2 Year 253 1%
Connection Of North-western Province To The Grid 3 Years 184 75%
Pensulo-Kasama 330kv Transmission Project 3 Years 154 100%
Pensulo-Chipata 330kv Transmission Project 3 Years 151 100%
Pensulo-Mansa Transmission Project 2 Year 224 0%
Improvement Of Power Supply To Mpika District 3 Year 30 3%
System Wide Reactive Power Compensation 1 Year 6 0%
Mungwi Electrification Project Tba 70 0%
Kariba Lake Shore/Bottom Road Electrification Project Tba 65 0%
Evacuation Of Power From Ndola Energy Phase Ii 1 Years 3 0%
Kabwe-Pensulo 330 kV Transmission Line #2 3 Year 120 0%
Msoro and Kabwe Step Down Reactors 1 Year 10 0%
Total 1,728
INVESTMENTS – Transmission

14. PROJECT DESCRIPTION STATUS TOTAL COST - US$'Million
Firming Up/Upgrade of Substations ON-GOING 41.76
Establishment of New Substations ON-GOING 42.53
Overhead Lines and Cables Reinforcement ON-GOING 24.57
Replace Obsolete Switchgear ON-GOING 33.89
Township Reinforcement ON-GOING 10.38
LTDRP - Rehabilitation of the 132kV, 88kV, 33kV and 11kV Lusaka
Transmission and Distribution Network PENDING 241.00
EUROBOND Distribution Network Projects ON-GOING 69.19
Distribution Expansion and Reinforcement Projects (DERP) ON-GOING 170.54
Increased Access to Electricity Services Projects (IAES) ON-GOING 69.81
Effect SCADA/DMS/OMS/MWFM/CCIVR/GNIS PENDING 25.00
Improve maintenance work management effectiviness and efficiencies ON-GOING 12.25
Ndola -Transformer Workshop Refurbshment PENDING 5.00
TOTAL 745.92
INVESTMENTS – Distribution

15. ZESCO’S RESPONSE – INCREASED ACCESS TO
ELECTRICITY

16. Efforts to Increase Access Rates
• Target 240,000 new customers between 2013 –
2018
• Reduced the cost of connection for low income
consumers to K250 from K750 for a standard
residential connection. project initially funded by
the World Bank
• Partnered with REA for grid extensions in rural
Zambia
• Increased customer base by 215,572 customers
from 581,663 in December 2013 to 797,535 as at
June 2016
• Expected to surpass target set in Business Plan
2013 2014 2015 2016 Total
New Connections 59,757.61 72,653.48 89,596.53 53,321.99 215,572
Target 48,000 48,000 48,000 48,000 144,000
Customer Base 581,663 586,303 648,236 797,535 797,535
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
-
50,000.00
100,000.00
150,000.00
200,000.00
250,000.00
NumberofNewConnections
New Customer Connections

18. THANK YOU