US developer plans 200MW solar

US-based renewables developer Ultra Green Corporation says it is negotiating a power purchase agreement (PPA) with Zesco for a 200MW solar power plant in Central Province. Ultra Green Zambia manager Emmanuel Mwizerwa said the company plans to start construction of the $216m project once Zesco approves the PPA.

“We have finished our feasibility studies and for our environmental reports, we have already submitted to the relevant authorities,” Mwizerwa told African Energy. “We are currently in negotiations to give us a power purchase agreement, and once we get that, then we start the groundwork.And I don’t think it is going to take long because they (Zesco) are already working on that.” He said construction was expected to take ten months.

Mwizerwa said the project would be financed with a $151m loan from the Export-Import Bank of the United States (Exim), while Ultra Green would provide equity financing of $65m. However Exim told African Energy:“at the present time, Exim is in ongoing discussions with Ultra Green but has not yet authorised financing for any solar project for the company in Zambia”.

The project site in Serenje district is 20km from the 330/66kV Pensulo substation, planned as a crucial link in interconnecting the Southern and Eastern Africa power pools by connecting Zambia,Tanzania and Kenya

“There is enough sun power in Serenje and even studies by the World Bank identify that, and so that’s why we settled for it as our first point of choice in Zambia,” Mwizerwa said. Depending on the success of the initial 200MW project, Ultra Green has plans for up to 1,000MW of solar power.

Zambia’s power deficit has reached 810MW as low rainfall has reduced hydroelectric generation, and consumers are currently experiencing at least ten hours of daily load shedding. The $2.3bn Kafue Gorge Lower hydropower project is expected to be fully commissioned by mid 2021 following five years of construction by Sinohydro and the first 150MW unit is expected to be delivered next month. Zambia is also seeking to develop solar power to diversify the energy mix but the government has a record of announcing projects that fail to materialise.

In June, Zesco announced a deal with Power China for three 200MW solar plants to be financed with $548m of loans, at a time when Zambia’s debt burden is already crippling the economy.The project is yet to get Treasury approval (AE 417/6).

A Zesco source said two solar plants developed under the Scaling Solar initiative were generating well below their installed capacity, despite hopes that their low generation cost would help relieve Zesco’s finances.