Zambia’s Solar Boom Meets Grid Reality
Zambia has become one of sub-Saharan Africa’s most promising solar investment destinations. In the past six months, the country has moved aggressively to attract foreign capital into its renewables sector—cutting red tape, speeding up licensing, and promoting public-private partnerships. But while the policy door is wide open, a more fundamental constraint is beginning to bite: the electricity grid itself.
In late July, Zambia’s Energy Regulation Board confirmed it had approved 43 solar licences and six operational permits in the second quarter alone, unlocking an estimated $160 million in capital. This followed a dramatic policy shift in April, when the government announced that solar project approvals would be issued within 48 hours—a breakneck pace in a region where permitting delays can often stretch beyond a year.
The speed of approvals has fuelled a burst of new activity. In June, a 100 MW plant in Chisamba came online, supplying power to mining giant First Quantum via the national grid. Just weeks later, BB Energy commissioned a 25 MW merchant solar farm—the first in Zambia to trade directly on the Southern African Power Pool. Foreign banks and infrastructure funds have taken notice, with Standard Bank backing BB Energy’s expansion to 118 MW over the next two years.
Why This Matters
Despite the success on paper, the rapid rollout is beginning to strain Zambia’s grid. Over 80% of the country’s electricity still comes from hydropower—much of it vulnerable to seasonal drought. Earlier this year, dry weather led to a 500 MW shortfall, exposing the fragility of Zambia’s generation mix. Now, even as new solar plants are licensed, many developers face uncertainty about whether their projects will be connected—and when.
The bottleneck is not about politics or policy anymore. It’s about infrastructure. Transmission capacity has not kept pace with the surge in generation permits. Projects in more remote regions, especially those not tied to industrial off-takers, risk being left idle or delayed. Government ministers have acknowledged the issue and say they’re working with donors on new interconnectors and substations—but timelines remain hazy.
Winners and Losers
Merchant power producers—those who can trade electricity regionally or sell directly to private clients—are best positioned to navigate the current grid constraints. BB Energy’s entry into the Southern African Power Pool offers one example. These developers aren’t tied to state utilities or long queue times for grid access. They’re nimble, bankable, and increasingly attractive to investors.
On the other hand, grid-dependent IPPs face growing risk. Delays in interconnection can stall returns, complicate financing, and throw off commissioning schedules. For foreign firms anchoring new industrial or agribusiness operations in Zambia, especially those reliant on stable, grid-based power, the risks are rising.
What This Means for Investment
For now, Zambia remains one of Africa’s most open and attractive solar markets. But investors need to go beyond headline announcements and understand the delivery mechanics. Grid connection is no longer guaranteed, and project timing must be stress-tested against local transmission capacity. Some developers are already shifting to hybrid models—combining solar generation with battery storage, direct supply, or partial grid feed-in.
In the near term, the best-positioned projects will be those aligned with off-grid demand, merchant trading platforms, or large private buyers. Meanwhile, the public sector will need to keep pace—because Zambia’s energy future is being built faster than its grid can carry it.