Zambia’s energy sources include; electricity, petroleum, coal, biomass, and renewable energy. It is only petroleum which is wholly imported in the country, while the country is basically self-sufficient in all the other energy resources. The demand for the most important energy source, electricity, in the country has been growing at an average of about 3 percent per annum mainly due to the increased economic activity in the country and the region.
ii. Investment Opportunities
Investment opportunities in the energy sector in include: electricity generation, petroleum, coal, and renewable energies.
Hydro power is the most important energy source in the country after wood fuel contributing about 10 percent to the national energy supply and is generated by three major hydroelectric power stations. It is estimated that Zambia has about 40 percent of the water resources in the Southern African Development Community, thereby enabling the country to have about 6,000 MW of hydropower potential. Of this, only about 2, 434.3 MW has been installed but the demand for electricity has continued to grow rapidly. Zambia and the SADC region has been facing power deficit since 2007 and 73 power generation projects are required to increase generation from the current 56,000 MW and surpass projected demand of 96,000MW by 2027.
Investment Opportunities in the power sector include:
• Electricity Generation, hydro and coal and Transmission;
• Establishment of Renewable, solar, and other energy facilities;
• Production of solar system components;
• Setting up isolated grid; and
• Sale of solar panels and related accessories.
Petroleum contributes about nine (9) percent to Zambia’s total energy requirements. There has been a significant increase in the consumption of petroleum products in the recent years. For instance, the national consumption of diesel grew from an average 1,500,000 litres per day in 2007 to about 2,700,000 in 2015.The current demand for petroleum products in the country is around 231 million liters per month.
Investment opportunities exist in the petroleum industry, which include upstream and downstream petroleum projects.
i. Upstream Petroleum: Recent exploration work for petroleum covering parts of North-Western, Western and Eastern Provinces of Zambia, using the Microbial Prospecting for Oil and Gas technique, have indicated that the Okavango and North Luangwa basins have potential for oil and gas. Government has tendered the oil blocks for oil and gas prospecting.
ii. Downstream Petroleum: The Downstream petroleum sector in Zambia has a deficit in bulk storage of petroleum products. In order to address this situation, the government is looking towards engaging a strategic partner to construct a 50 million liters Petroleum Terminal in Lusaka, the capital City of Zambia, on a Build Operate and Transfer (BOT) basis.