Simwatachela Solar Mini-Grid Project

Simwatachela Solar Mini-Grid (SMG) Project involves the establishment of a SMG in Simwatachela Village of Zimba District, Southern Province. This will involve the installation of a minimum 44.64Wp solar power generating system and the construction of a total of 2.2km of MV OHL. The residents of this area mainly depend on firewood and charcoal as the main sources of energy for cooking and heating, while solar and other batteries are used for lighting and entertainment. This project envisions to electrify an estimated 350 households, 2 primary schools and other institutions. 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 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 also economically viable at the respective tariffs with ENPV of K8.7m ($483, 333.33) at exchange rate of K18 and EIRR of 24% 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. Estimated cost for this project is $508, 482.68, consisting of the generation facility at $233,497.84, distribution network $135,360, and installation works at $139,624.84 respectively. Hence, a Private investor(s) 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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