Lubofu Solar Mini Grid Project

The Lubofu Solar Mini Grid Project is aimed at providing electricity access to and catalyze the social and economic activities of a rural community in Kasempa District of North Western Province of Zambia. The proposed works involve the installation of a minimum 27.57kWp solar power generating system as well as the construction of at least 5.7km of 400V overhead line. The cost of the project is estimated at US$ 847,811.07 consisting of the generation facility; distribution network and metering; installation works and other costs for the entire Solar Generation System. The potential site is located 26km from the grid. The OPEX is estimated at 2% of the CAPEX at US$6,318.29. The plant life has been estimated at 20 years. The project is viable with a capital subsidy of 100% with both financial and economic rates of return being positive. The Rural Electrification Act No. 20 of 2003, mandates the Authority to design and offer, on a competitive basis, to developers and/or operators, smart subsidies for capital costs on projects that are designed to supply energy for development of rural areas. The issuance of these subsidies is guided by the Framework for Managing Capital Smart Subsidies in Zambia and The Guidelines for Financing Rural Electrification Projects in Zambia. The project has the potential to make 210 connections. The project also envisages to promote the use of the EaaS business model in the billing system of off-grid solutions through the use of the Pay as you Go (PAYGO) approach. This business model will entail not only selling electricity but also some appliances to the beneficiaries on a lease-to-own basis. The Project is available for FDI through a majority stake with subsidies from either REA or other cooperating partners. Alternatively, REA could develop the sites and engage a private company through a management contract to oversee operations and maintenance of the project site.

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