Zambia’s industrial growth depends on stronger energy security, flexible procurement and bankable power projects

Lusaka, Zambia – Zambia's ambitious industrialisation drive and sustained economic growth are increasingly imperilled by a complex and evolving energy landscape. Commercial and industrial energy users across the country are grappling with escalating power demand, persistent grid constraints, and the imperative to secure reliable and affordable electricity. This confluence of factors underscores a critical national challenge: the direct correlation between robust energy security and the nation's capacity for industrial expansion. For decades, Zambia has relied heavily on hydropower, which historically constituted over 80% of its electricity generation. While offering a clean energy source, this over-reliance has exposed the economy to severe vulnerabilities, particularly during periods of drought exacerbated by climate change. The recent past has seen significant load shedding, with power outages lasting up to 21 hours daily during the 2023-2024 El Niño drought, severely impacting productivity and operational costs for businesses, especially in the crucial mining sector which accounts for a substantial portion of national electricity consumption. The fragility of this system highlights the urgent need for a diversified energy mix and resilient infrastructure. In response to these challenges, the Zambian government has initiated a series of reforms aimed at liberalising the energy market and attracting private sector investment. Key among these are the Electricity Open Access Regulations introduced in 2024, which permit independent power producers (IPPs) and traders to sell electricity directly to customers using ZESCO's transmission network for a wheeling fee. This move, alongside the establishment of an Energy Single Licensing System and the Integrated Resource Plan (IRP), seeks to foster competition, enhance supply, and reduce the burden on the state utility, ZESCO. Initiatives like the Presidential Constituency Energy Initiative and the scaling up of solar proje