Over the last several decades, sustained economic growth in Zambia has resulted in an increased demand for electricity. The supply, however, has not been able to meet this demand. This discrepancy is due to the fact that Zambia heavily relies on large hydro power plants for its electricity supply. Due to significant and recurring periods of droughts in the country, it has not been possible to operate the hydro plants at their full capacity. In Zambia, the level of connection to electricity on average is 30% nationwide and only 5% in rural areas. In February 2016, the government acknowledged that Zambia faced a considerable deficit of power generation.

In order to overcome these power shortages, the government is importing energy under unfavorable conditions, which in turn is creating a negative impact on the economy and on fiscal resources. For these reasons, the government is starting to consider adopting the widespread use of renewable energies, such as solar, hydropower, biomass, and geothermal energies.

The overall objective of the project, in cooperation with the European Union, is to further support the efforts of the Government of Zambia in increasing access to clean, reliable, and affordable energy and in guaranteeing the production of renewable energy. The project will assist public institutions in revising, reinforcing, and further developing policies, as well as institutional, legal, and regulatory frameworks for unlocking the potential of renewable energy and increasing its efficiency throughout the country.

The main goals of the project are:

• Strengthening institutional, regulatory and commercial arrangements for the planning and development of renewable energy and energy efficiency projects.
• Strengthening the technical and organizational capacities of the stakeholders of the energy sector, in order for them to operate in an improved framework, both efficiently and inclusively.
• Targeted communication campaigns on the benefits of renewable energy and energy efficiency, following best practices from other countries.

To date, the project has supported the government in Zambia through:

• Establishment of a Mini-grid Regulatory Framework, aimed at facilitating the growing off-grid electrification market in Zambia, given the fact that the country has large numbers of areas that cannot be accessed by normal grids. In rural areas, where access to electricity ranges from 0% to 5%, the project is already developing mini-grids based on renewable energy sources to stimulate productive economic activities.
• Development and promulgation of National Energy Policy 2019: the revised policy promotes cost reflective tariffs, scaling up clean energy technologies and energy efficiency, the establishment of an open and non-discriminatory transmission access regime, and increased access to energy services in urban and rural areas.
• Implementation of a Sector-wide Monitoring and Evaluation System: The M&E plan, developed with the input from all energy sector institutions, was promulgated by the Ministry of Energy. It will harmonize energy statistics relevant to planning, budgeting, and achieving the national development goals put in place for the energy sector. The M&E Plan implementation is anchored by a management information system developed with the project support.
• Development of a Renewable Energy Strategy and Action Plan which will further emphasize the importance of investment in energy sources’ diversification in Zambia to meet increased demand for modern energy services, therefore ensuring the country's energy security.
• Establishment of an Energy Efficiency Strategy and Action Plan which will address technical transformation of energy and behavioral aspects in the energy sector and energy consuming sectors such as mining, agriculture, transport, industry and buildings. It will consider diverse instruments to achieve energy efficiency such as human skills, institutional capacity, financial and fiscal incentives, awareness and standards in modern energy efficient equipment and services.
• First in the history of the energy sector, a Gender Strategy and Action Plan which will promote gender balance in energy issues at all levels. It will ensure that gender mainstreaming in the energy sector has sufficient leadership and resources to be implemented.
• Development of a Net-Metering mechanism, which will promote autonomous renewable energy generation covering both embedded generation and net-metering as key interventions to overcome electricity shortages.
• Streamlining licensing processes and reducing time and transaction cost for Independent Power Producers, Mini-Grid and other Renewable Energy developers by developing a Zambia Power Developers Framework and One Stop Shop for independent power producers.
• Implementation of a comprehensive Capacity Building Program, which is scaling up expertise and capacities across the country to develop sustainable renewable energy solutions, to mainstream energy efficiency, as well as raising the level of energy literacy among state and non-state actors and of the general public.