The Development Bank of Zambia (DBZ) is supporting renewable energy growth in the private sector by providing USD2.5 million. This funding will boost renewable energy projects across Zambia, creating new opportunities and driving sustainable development.
The government recently launched the Development Bank of Zambia and the Rural Electrification Authority Off Grid Loan Facility (OGLF) to support and enhance private sector participation in the rural electrification space in Zambia.
The USD26.5 million financing has been made available by the International Development Association of the World Bank through the Electricity Services Access Project (ESAP) to increase electricity access in rural areas in Zambia.
From the total project amount, USD2.5 million has been allocated to support Small and Medium Enterprises (SMEs) through renewable energy mini-grids and stand-alone solar systems and is structured to leverage financing and participation from the private sector.
The project is being implemented through the Rural Electrification Authority (REA) as the technical partner, while the role of the DBZ is to manage the USD2.5 million line of credit as the Apex Lender, which funds be accessible through ZANACO as the retail partner.
The pilot project will see the DBZ work closely with the private sector and the government to increase energy access in the country and develop a robust and bankable pipeline to unlock further investment in the renewable energy sector.
During the launch officiated by the Minister of Energy Eng. Peter Kapala, DBZ Acting Managing Director, Mr. Maybin Muyawala said the project is among other initiatives the Bank has embarked on in line with its mandate to promote economic development as a Development Finance Institution (DFI).
“The Development Bank of Zambia will continue to augment its capacities to implement, manage and monitor climate finance projects. The Bank commits to providing additional support to private and public sector entities to enhance access to financing through loans, equity, and guarantees. This combination of financing solutions is what the private sector needs to become competitive and successful in the market.”
The DBZ aligns itself with priority sectors identified by the government in the Eighth National Development Plan (8NDP) such as the energy sector, to drive economic transformation and job creation.
The successful implementation of the project is intended to result in improved productivity for small and medium-scale enterprises with improved accessibility to electricity.