Zambian Energy Chief Urges Banks to Step Up Funding for Power Sector Growth
Lunsemfwa Hydro Power Company CEO, Alpha Mwale, is calling on Zambia’s banking sector to increase financial support for the rapidly growing electricity industry.
Speaking at a recent Southern African Power Pool (SAPP) gala dinner, Mwale highlighted the current power deficit in the region as a significant opportunity for banks to contribute to the energy sector’s development.
He pointed out that the traditional model of relying on Power Purchase Agreements (PPAs) as security for financing might be hindering progress. With the growing demand for electricity, Mwale argued that the SAPP market itself is sufficient guarantee for power producers.
“We think the SAPP market is enough to guarantee the market for power,” he stated. “In this power deficit, there should be no doubt that if you produce power, somebody will buy it.”
Mwale urged banks to recognize the electricity sector as a lucrative market. He warned that a lack of investment could slow down development, as companies are forced to self-finance projects on a piecemeal basis.
“If the finance industry can’t 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,” he cautioned.
Mwale revealed there are numerous energy projects in Zambia seeking financial backing, including Lunsemfwa’s own 20-megawatt solar project planned for this year.
The call for increased funding comes as Zambia recently handed over its chairmanship of the SAPP to another member country. The regional power organization brings together utilities from 12 Southern African Development Community (SADC) nations.
