Sikaunzwe Solar Mini-Grid Project

Sikaunzwe Solar Mini-Grid Project involves the establishment of a Solar Mini-Grid in Sikaunzwe Village of Kazungula District, Southern Province. This will involve the installation of a minimum 9.57Wp solar power generating system and the construction of a total of 2.2km of MV OHL. The residents of this community mainly depend on firewood and charcoal as the main sources of energy for cooking and heating while dry cells, solar and vehicle batteries are used for lighting and entertainment. This project envisions to electrify an estimated 50 households, 1 public institution and 2 Businesses. The project also intends to promote the use of the EaaS business model in the billing system of off-grid solutions through the use of Pay as you Go (PAYGO) approach. This project has positive net income from year one till end of life with a profit of K 37,140.08 ($2,063.34) at exchange rate of K18 during its first year of operation. The Project is also economically viable with ENPV of K2.9m ($161,111.1) and EIRR of 30% and with a life span of 20 years. This Project is open for FDI through a majority stake and the Rural Electrification Authority (REA) will facilitate the project. The total estimated cost for this project is $89,240.25 consisting of the generation facility at $40, 976.79, distribution network $23,760, and installation works at $24,503.46 respectively. An equity partner is required to provide investment resources in cash and in kind. Alternatively, REA could develop the sites and engage a private company through a management contract to oversee operations and maintenance of the project sites. The project is also viable with a capital subsidy of 100% from REA and 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.

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