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2023Annual UpdateYear in review

AcronymsDOE Department of EnergyGET FiT GlobalEnergyTransferFeedinTariREFIT RenewableEnergyFeedinTariERB Energy Regulation Board KfW German Development BankTA Technical Assistance VGF Viability Gap Funding MWDS Ministry of Water Development and SanitationMFNP Ministry of Finance and National Planning MGEE Ministry of Green Economy and EnvironmentMOE Ministry of EnergyREA RuralElectricationAuthorityZEMA Zambia Environmental Management Agency WARMA Water Resources Management Authority NHCC National Heritage Conversation Commission CEEC Citizens Economic Empowerment CommissionOPPPI OceforPromotingPrivatePowerInvestmentsPV Photovoltaic EMA Environmental Management ActMW MegawattsSHP Small Hydro PowerRfP Request for ProposalRE Renewable EnergyIA ImplementationAgreementIMF InternationalMonetaryFundIPP IndependentPowerProducer8TH NDP Eighth National Development PlanZRA Zambezi River Authority ZPC Zimbabwe Power CompanySTGD Short Term Grid Development COSS Cost of Service Study

GET FiT Zambia | Annual Update 20231Table of ContentsMessage from the Ministry of Energy 2Acknowledgement from PS 3About GET FiT Zambia 5GET FiT Zambia – Reections of the Year in Review 12Solar PV and Small Hydropower Tender Status 13Technical Assistance 18Other GET FiT Initiatives 20Outlook 22

In2023,thecountrycontinuedtoexperienceener-gydecitscausedbyeectsofclimatechangeev-idencedfromthebelownormalrainfallexperiencedduring the 2022/23 rain season. This phenome-non resulted in reduced water inows in Zambeziand Kafue River basins that supply 80 percent of Zambia’selectricity demand. Subsequently,powergeneration capacity diminished by about 400MW,resulting in load-shedding. Theforegoing,promptedtheGovernmenttoembarkondiversifyingtheenergymix.InlinewithGovern-mentaspirations, theGETFiTZambia Programmeprovides a long-term solution to support the Gov-ernment’senergydiversicationagenda.Therefore,the Government remains committed to ensuring that the 120 MW solar-PV projects awarded in 2019 under the GETFIT Programme come to fruition assoon as possible. During the period under review, signicant strideswere made towards meeting prerequisites stipulat-edbylendersforprovidingnancefortheGETFiTZambia 120 MW solar PV projects. While the debt re-structuringconclusionsweredelayed,progresshadbeen made on addressing most of the requirement’s lenders had given as imperative before they could considernancingtheGETFiTProjects.Inadditiontotheeconomicupdates,engagementsweremadewiththelendersthroughtheMinistryinthersthalfof 2023, following whichsome lendershave sinceexpressedrenewedinterestinnancingtheGETFiTProjects on agreed terms and conditions. In 2024,we look forward to the projects attainingnancialcloseandmovingclosertothecommence-mentofconstruction,whichwillsee120MWofsolarpower on the grid. The Government also continues to foster growth in the sector with progress on open access to elec-tricity. Following the development of an electricity Open Access framework comprising Open Access Regulations, Market Rules and Guidelines, OpenAccessMarketStructureandDesign,andTransmis-sionandDistributionMethodology,theGovernmentlooks forward to implementing the approved frame-work in 2024. IwishtothanktheGermanGovernmentfortheirun-waveringsupporttowardsZambia’senergysector,despite the challenges experienced. I further wishtothankallCooperatingPartners,nanciers,devel-opers and key stakeholders in the energy sector for their support. Eng. Peter C. Kapala Minister of EnergyMessage from the Ministry of Energy2Message from the Ministry of Energy

TheMinistryofEnergy(MoE)wishestoexpressdeepappreciation to our partners who support the devel-opmentoftheGlobalEnergyTransferFeedinTari(GET FiT) Zambia Programme. This programme is designed to ensure that Zambia promotes private sector participation and diversies its energy mixthrough the implementation of low-cost renewable energy projects. Sincere gratitude goes to the German Government and the German Development Bank (KfW) who are our implementing partners. KfW have provided -nancialsupportinformofTechnicalAssistance,Vi-ability Gap Funding (VGF) and the Grid Facility. FurtherandonbehalfoftheMinistryofEnergy,IwishtoexpressmyparticularspecialwordsofthankstothefollowinglineMinistries,Governmentagencies,departments,andinstitutionsfortheirsupport:  Ministry of Finance and National Planning (MFNP), Ministry of Justice (MOJ), Ministry ofGreen Economy and Environment (MGEE) and Ministry of Water Development and Sanitation (MWDS);  ZESCO Limited, Rural Electrication Authori-ty (REA), Zambia Environmental ManagementAgency(ZEMA),WaterResourceManagementAgency (WARMA), Energy Regulation Board(ERB),CitizensEconomicEmpowermentCom-mission(CEEC),andNationalHeritageConser-vation Commission (NHCC).The programme’s ultimate success will depend on all stakeholders’ commitment and invaluable con-tributions. We look forward to your continued support as we work towards successfully implementing all initia-tives under the GET FiT Zambia programme. Peter Mumba Permanent Secretary – Technical Services Ministry of Energy Acknowledgement from PSGET FiT Zambia | Annual Update 20233

Contributing toa climate-friendlydevelopment pathand sustainablegrowth in Zambia

GET FiT Zambia | Annual Update 20235GET FiT Zambia is the implementation programme for the Government ofZambia’sREFiTStrategy,whichaimstofacilitateprivatesector investmentinsmallandmedium-scaleRenewableEnergyIndependentPowerProjects(IPPs)inZambia.About GET FiT ZambiaGET FiT Zambia is nanced by KfW, on behalf ofthe German Government. The Zambian Ministry of Energy(MoE)istheProjectExecutingAgency(PEA)responsible for the programme. The GET FiT Secre-tariat(ledbytheProgrammeImplementationCon-sultant, Multiconsult Norge AS was appointed in2018 to work with the Department of Energy (DoE) to implement the programme.GET FiT Zambia is the second roll-out of the GET FiT concept after a successful pilot in Uganda,where it achieved approximately 160MW of in-stalled renewable energy capacity via 17 projects. GET FiT Uganda established a track record for pri-vate sector participation. GET FiT Zambia has been designed based on various lessons learned and on-the-groundexperienceinUganda–whileconsider-ingthecountry-speciccircumstancesandbarriersto private sector involvement. Zambia started the year with an energy crisis in GET FiT Zambia is implemented by the MinistryofEnergy(DepartmentofEnergy),in collaboration with KfWThe objectives of GET FiT Zambia are:  Procurement of up to 220 MW of re-newableenergycapacity,asGETFiTZambiahasbecometheocialimple-mentation programme for the Zambian RenewableEnergyFeed-in-Tari(REFiT)strategy.  Contribution to diversify Zambia's power mix(bothintermsoftechnologyandge-ography)whileensuringcost-eective,environmentally,andsociallysustainableprojectstomaximisevalueforZambianend users.  IntroductionofstandardisedlegaldocumentationforIndependentPowerProducers(IPPs)andframeworkthatwill enable successful integration of the procured renewable energy into the national grid.  Promotion of competition and private sector participation in the Zambian power sector.

About GET FiT Zambia6Programme Structure GET FiT Zambia is motivated by acknowledging thewiderangeofpositive,sustainableeectsthatthe development of renewable energy projects can have for economic and social development and the strong potential for such projects in Zambia. At the heart of the programme is the realisation of 220 MW low-costrenewableenergycapacity,procuredfromprivate sector entities through a competitive pro-curementprocess:  120 MW Solar PV  100 MW Small Hydropower Additionally,GETFiTZambia aimstoboost institu-tional capacity and improve the investment frame-work for private sector participation in the Zambian power sector. A key feature is to introduce a transpar-entrenewableenergytenderprocess,advocateformore streamlined licensing and permitting processes and strengthen power grid operations to procure and integrate even more renewable energy in the future. The up to 220 MW is to be achieved through pro-curementofpowerfromprivatesectorIndependentPowerProducers(IPPs),inalignmentwithZambia’sPublic Procurement Act and based on international competitive bidding. Under the procurement frame-work,theIPPsareresponsiblefortheirownsitese-lection, feasibility studies, and nancing (includingdebt and equity). The current 41 million Euro grant funding under the GET FiT Zambia programme is thus not aimed to-wardsprovidingdebtnancingtoindividualprojects.Instead,itisaimedatassistingtheMinistryofEnergywith developing a sustainable procurement frame-work,boostinginstitutionalcapacity,importantly,im-proving the investment framework for private sector participationintheZambianpowersector.Ifneces-sary, the grant will provide a subsidy to cover anyviabilitygapbetweenthecost-reectivetariandthePPAtariorbeutilisedtowardsthegridfacility.TheGET FiT Zambia programme was tailored to address the challenges stakeholders regarded as barriers to achieving these objectives. It is envisaged that byaddressingthesechallenges,agoodfoundationandframework can be laid that will facilitate future low-cost procurement of energy from private sector enti-tiesinZambia:

7GET FiT Zambia | Annual Update 2023GET FiT Zambia toolkit for addressing barriers in the power sectorGET FIT TOOLSBARRIER DESCRIPTIONMECHANISM FOR ADDRESSING THE BARRIERS ࢚ Design&implementareliable,competitivetenderprocessand work with Ministry of Energy (MoE) to ensure it can be replicated for future rounds. ࢚ Designstandardisedprojectagreements,incl.PowerPurchaseAgreement(PPA),GridConnectionAgreement(GCA)andImplementationAgreement(IA). ࢚ Identifybottlenecks&adviseonstreamlinedlicensing&permitting process. PROCUREMEN T & TRANSACTIONS ࢚ Identifyappropriateriskmitigationtoolsthatwillenablesmalltomediumsizeinvestorstoaccessnanceandachieve bankability. ࢚ CollaboratewithAfricaTradeInsurance(ATI).DEBT & RISK MITIGATION FACILIT Y ࢚ GETFiToerstari-basedsupportintheformofViabilityGap Funding (VGF) for a limited portfolio of Renewable Energy projects. ࢚ VGF facilitates project viability by providing a capital grant to private sector entities willing to take the risks of invest-ing into an evolving renewable energy market in Zambia. ࢚ RequirementforVGFexpectedtoreduce,withincreasinginvestment,economiesofscale&improvedinvestmentframework conditions. VIABILITY GAP FUNDING ࢚ Includesadvisorysupport. ࢚ Providecapitalgrants,totheawardedSHPdevelopers,for the construction of the grid construction & selected network reinforcements to enable the integration of Small Hydropower (SHP) and other future renewable energy technologies. The grid assets will remain the ownership of ZESCO. GRID FACILITY ࢚ Capacity building programme for key sector stakeholders as part of the Technical Assistance (TA) facility ࢚ TA support earmarked for supporting the SHP portfolio. TECHNICAL ASSISTANCEReliable Procurement Framework & Improved Investor ConditionsRisk Mitigation Tools to ensure access to funding & achieve bankabilityHigh Cost of Capital availabilityGrid availabilityCapacity Constraints & Skills Gap

8About GET FiT ZambiaGET FiT Programme, Stakeholders and Partners: The following entities have been identied as thekey stakeholders and partners infullling theGETFiT objectives.  TheMinistryofEnergy,throughtheDepartmentofEnergy,isresponsiblefordevelopingandim-plementing policies, programmes and projectson renewable energy, energy eciency, elec-tricity and power development to facilitate so-cio-economic development. The functions of the departmentinclude: – Facilitating the development and review of policies and legislation on energy to provide an appropriateframeworkfortheeectiveman-agement and implementation of programmes. – Facilitating the construction, rehabilitation,and maintenance of energy infrastructure to ensure the security of supply. – Promoting the development and utilisation of climate-resilient and renewable energy tech-nologies. – Promoting the development and utilisation of climate-resilient and renewable energy tech-nologies. – Maintainingadatabaseonenergyresources,production, distribution, consumption, andpricing. – Formulating and reviewing energy strategy and action plans to facilitate resource mobili-sation and attaining set objectives. – Providing technical guidance and support to stakeholder institutions on matters relating toecientmanagementandconservationofenergyUnder the DoE are several units that assist the Ministryinachievingitsobjectives,includingtheOceforthePromotionofPrivatePowerInvest-ment(OPPPI).  The Oce forPromoting Private PowerInvest-ment (OPPPI) - - OPPPI is a project unit es-tablished under the Ministry of Energy for the purpose of promoting private sector participation in developing and implementing power projects. – The OPPPI coordinated the implementationof signicant private sector power projectssuch as the 300 MW Maamba Coal Fired PowerPlant,120MWItezhi-TezhiHydroelec-tricPowerplant,750MWKafueGorgeLowerHydroelectric Power Project and the Zam-bia-Tanzania-Kenya Power InterconnectorProject.TheOPPPI is currentlycoordinatingfeasibility studies for a combined capacity of over 2000MW, with some projects currentlyat the Power Purchase Agreement (PPA) ne-gotiations stage.  Energy Regulation Board (ERB)– The ERB ismandatedtoensureeectiveenergysectorreg-ulation. The ERB does this through issuing li-censestoundertakings,monitoringtheeciencyandperformanceofundertakings,receivingandinvestigatingcomplaints,approvingthelocationand construction of energy infrastructure,priceadjustments of energy services and products,anddevelopingstandardcodes,guidelines,andother regulatory interventions.  Zambia Environmental Management Agency (ZEMA)–ZEMAisanindependentenvironmen-tal regulator and coordinating agency. ZEMA is mandated to do all such things as are necessary to ensure the sustainable management of natu-ralresourcesandprotectionoftheenvironment,prevention and control of pollution. ZEMA was established through an Act of Parliament, theEnvironmental Management Act (EMA) No. 12 of 2011. The EMA provides for the continued focus on Environmental Management, including newand emerging issues such as climate change,pollutionfromPersistentOrganicPollutants,andelectronic waste.ZESCO - ZESCO Limited is a power utility owned by the Government of the Republic of Zambia that supplies electricity and energy solu-tions within Zambia and the Sub-Saharan region. The company is the dominant participant in the electricity market in Zambia. ZESCO Limited is a vertically integrated power utility with operations cutacrosstheelectricityvaluechain,generation,transmission,distribution,andsupply.TheCor-poration owns and operates several hydropower stations with a combined power-generating ca-pacityofmorethan3,000MW.

GET FiT Zambia | Annual Update 20239  The Rural Electrication Authority (REA) - REAwas established in 2003 by an Act of Parliament to increase electricity access in rural areas. REA utilizesGridExtension,Biomass,Wind,SolarEn-ergy,and Mini-Hydrotoreachitstargets.Elec-tricity drives economic productivity, and ruralelectrication boosts agriculture, commerce,and small-scale industries in Zambia. REA aims forbeneciariestoenjoyimprovedlivingstand-ards,better medicalcare,enhanced agricultur-al production,and new businessopportunities.REA will play a role in the SHP tender.  The Water Resources Management Authori-ty (WARMA) – WARMA was established underthe Water Resources Management Act No. 21 of2011,servesas theregulatorybodyrespon-sible for the management and development of the nation's water resources. WARMA’s primary aim is to ensure equitable access to water for allstakeholders. Its coreobjectivesinclude themanagement, development, conservation, pro-tection, and preservation of both surface andgroundwater resources. WARMA is an institution that will play a role in the SHP tender.Grant DonorThe German Government through KfW REFiT 205 MW Allocation Competitive Procurement ProcessSolar PV 100 MWSmall Hydropower100 MWImplementing Entity Department of Energy GET FiT SecretariatFinancing Agreement Signed with Ministry of Finance and National Planning Separate Agreement Signed with Ministry of EnergyGET FiT Zambia Programme Structure

10About GET FiT ZambiaProgramme Benets GET FiT Zambia programme objectives align with the Government of Zambia’s development priorities and implementationstrategies,assetoutintheEighthNational Development Plan (8th NDP). Amongst the stated objectives is the promotion of green growth to safeguard the environment and natural resourc-es. This is especially important as power from re-newableenergysourcesinZambia,otherthanlargehydropower, is still low, with electricity generationfrom solar PV only accounting for 3 percent of the total installed generation capacity and hydropower accounting for over 80 percent. This has made the Zambian energy sector vulnerable to the impacts of climate change, as droughts experienced over re-cent years have led to lower power production from hydropower,resultinginsignicantpowershortag-es.Therefore,thediversicationofthe energymixbecomes critical to ensure a sustainable power sup-plytomeetotherstatedcountrypriorities,suchasannual real gross domestic product (GDP) growth of 4.5 percent by 2026 and increased economicgrowth from the agricultural, manufacturing, tour-ism,andminingsectors.Byitsdesign,theGETFiTZambiaprogrammeplaysa unique role as a catalyst and enabler to ensure progress towards achieving the country's priorities. Below are some of the specic benets the pro-grammeportfoliobrings:  120 MW of Solar PV projects will enable di-versication of generation sources by adding120 MWacofclimate-friendlySolarPVtothegrid,increasing the generation capacity from renew-ables. This fulls the medium to the long-termaimoftheREFiTStrategy,ensuringthatrenew-ables contribute to a diversied energy mix tocreate increased energy security. The 120 MWac of Solar PV projects are relatively advanced and onlyneedtosecurenanceandcommenceduediligencebeforeimplementationstarts,allowingthe projects to be implemented relatively quickly.  50 MW Small Hydropower (SHP) projects, as part of the rst round of procurement is beingtargeted in the north and north-western parts of the country where rainfall is the highest. The Grid Facility under the programme further aims to contribute towards strengthening network in-frastructure to enable both the connection and integration of the SHP projects in the northern part of the country. The network infrastructure developed through the deployment of grants will be owned by ZESCO. The deployment of the vi-ability gap funding (VGF), if required, is furtheraimed at addressing project viability if renewable energyfeed-intaris(REFiTs)arenotsucienttoensure the project viability. The grants will thus enable the development of key infrastructure while ensuring SHP taris remain aordable tothe ZESCO and its electricity consumers.  The GET FiT Zambia projects will represent an increased national electricity generation capac-ity,whichthecountryneedstoaddresscurrentelectricity decits and to prevent further futuredecits. In addition, the investment of diversetechnologies in the sector increases private sec-torparticipationintheenergysector. It diversi-es the Zambian energy mix through solar PVand decentralised SHP deployment. This way,the programme plays an essential role in satis-fying current power needs and improving future power supply reliability.  The programme is carried out through a trans-parent, competitive procurement process withthe involvement of the programme stakehold-ers,particularlytheDoEandOPPPI,whoareacentral part of the programme implementation team. Other stakeholders, including the Minis-try of Justice, Ministryof Financeand NationalPlanning and ZESCO as the o-taker, are alsoconsulted in developing project agreements. The ERB will also play a key role in setting the REFiTs for the SHP programme. This further aligns with the 8thNDP objective of ensuring a good govern-ance environment.  The comparatively lower price achieved through acompetitiveprocesswillallowZESCO,astheo-taker,toselllow-costpowerpurchasedtoitsconsumers in Zambia.

GET FiT Zambia | Annual Update 202311  The high cost of capital and inadequate regu-latory frameworks for renewable energy have been said to contribute to a low rate of private sector investment in renewable energy due to uncertainties around funding. The GET FiT pro-gramme aims to improve the institutional frame-work conditions, build capacity and establishstandardised project agreements for future im-plementation by the MoE as part of the owner-ship strategy.  The continuation of the procurement of solar PV and SHPs will support and enable future power development, particularly the implementationof the Integrated Resource Plan (IRP), current-ly under development and set to be launched in 2024.  In summary, GET FiT supports the country’sneed for consistent long-term planning and pro-ject implementation as the country also embarks onactivities to increasemanufacturing, mining,etc.,tomovetowardseconomictransformation.With the implementation of the projects over severalyears,capacitybuildingandjobcreationwillbeanaddedbenetfromimplementingtheGETFiTprojects,therebypositivelycontributingto human and social development.

12GETFiTZambia–ReectionsoftheYearinReviewZambia started the year 2023 with an energy cri-sisthatimpactedthenation.Theeectsofclimatechange resulted in low water levels at the Kariba Dam, which forced the Zambezi River Authority(ZRA) to restrict the power production for ZESCO and the Zimbabwe Power Company (ZPC). ZESCO was compelled to implement load management for up to 12 hours daily. A successful outcome of GET FiT Zambia has the potential to make Zambia more resilient in tackling the impact of climate change. The120MWSolarPVprojects,thus,remaincriticalfor the country as they contribute towards increas-ingtherequireddiversiedsourcesofelectricityinthe country,which areessential to mitigate powerdecitscausedbyclimatechange.Theneedforal-ternative sources of renewable energy reiterates the needtoensureprogresstowardnancialcloseandconstruction of the 120 MW Solar PV projects. ThroughtheinterventionofHon.Eng.PeterKapala,MinisterofEnergy,theprospectstounlocknancingfor the GET FiT 120 MW Solar PV projects in 2024 arepositive.TheGETFiTSecretariat,managedbyMulticonsult in collaboration with the Department of Energy,arrangedameetingbetweentheMinisterofEnergy and prospective lenders. The purpose of the meeting was to discuss the challenges and progress made by the government of Zambia in addressing the lender’s requirements for nancing projects inZambia. The Minister emphasised the importance of lenders supporting Zambia’s ambition to grow its energy portfolio, which was critical tosupport-ing economic growth and increasing energy access. Through this intervention of the Minister, lendersagreed to consider the possibility ofnancing theGET FiT 120 MW Solar PV projects.The Solar PV tender's successful bidders contin-ued demonstrating a commitment to the continued development of their projects. While the implemen-tation of the SHP component of the GET FiT pro-gramme is still notconrmed, thedevelopers thatwerepre-qualiedthroughtheRequestforQuali-cation(RfQ)processin2019-2020havealsocontin-uedtoreconrmtheirinterestthroughdialogueandregular follow-up by the Secretariat. The Secretariat continued engagement to ensure progress on the Open Access Technical Assistance (TA) project. Through support from the GET FiT ZambiaTechnicalAssistanceFacility,TheMOEandERB developed an Open Access framework envis-aged to be implemented in 2024. These TA activi-ties,ensurethattheGETFiTprogrammecontinuesto contribute towards strengthening the ´framework for enabling and promoting private sector invest-ments in renewable energy’ in Zambia. GET FiT Zambia – Reections of the Year in ReviewPositivedevelopmentinthecountry'smacroeconomicenvironment,coupledwithinterventionsfromtheMinisterofEnergyin2023,broughtmuch-neededfavourablewinsfortheGETFiTprogramme’seortstorealise the awarded Solar PV projects.

GET FiT Zambia | Annual Update 202313Solar PV Tender A positiveyear forGET FiT Zambia – Funding for120 MW Solar PV projects Unlocked.In2023,optimismsurroundedtheGETFiTZambiaprogram as Zambia awaited positive developments in debt restructuring. Though delayed, an agree-ment with ocial creditors was reached by mid-year, easing the economic slowdown and pavingtheway for unlocking nancing amidst the energyshortages faced in the sector2023 highlighted the crucial role of programmes like GET FiT Zambia in addressing the energy chal-lenges.Theyearkickedowithanenergyshortagecrisis spurred by climate change-induced low water levels at the Kariba Dam, prompting the ZambeziRiver Authority (ZRA) to restrict the power produc-tion for ZESCO and the Zimbabwe Power Company (ZPC). The need for load management measures of up to 12 hours sent a clear signal for the need to unlock funding to allow the implementation of more renewable energy sources to help Zambia diversify itsenergymix.Solar PV and Small Hydropower Tender StatusThe Solar PV and SHP tenders are two of the main components of the GETFiTZambiaprogramme,andensuringprogressontheseisakeypriority for the GET FiT SecretariatMonguSolweziNdolaChomaKabweLusakaMansaChipataKasamaChinsaliDemocratic Republic of the CongoAngolaBotswanaZimbabweTanzaniaGARNETON North & SouthDeveloper InnoVent & CECRegion CopperbeltSize 40 MWacGeneration 113 GWh/year 4.80 USc/KWhBULEMU West & EastDeveloper Red Rocket Region KabweSize 40 MWacGeneration 126 GWh/year 3.99 USc/KWhSOLA 1 & 2Developer Globeleq & SOLARegion KafueSize 40 MWacGeneration 120 GWh/year 4.52 USc/KWhZambiaMalawi

14Solar PV and Small Hydropower Tender StatusThe urgency for renewable power emphasised the need to ensure progress was made on advancing the120MWSolarPVprojectstonancialcloseandconstruction. This led to the Minister of Energy re-questing a meeting with lenders to understand their requirementsfornancingprivate-sectorprojectsinthe energy sector in light of the progress made by the government in addressing most of the concerns raised during 2020 when funding was initially sus-pended. The meeting sparked interest from a wide range of key stakeholders as it was realized that a collabo-rative approach would be required to address the sector challenges and unlock funding not only for the benet of the 120MW Solar PV projects butthepipelineoffutureenergyprojects,includingtheenvisaged SHP projects. The meeting was thus at-tendedbythefollowing keystakeholders:Ministryof Energy, German Cooperation, Foreign, Com-monwealth and Development Oce (FCDO), KfW,ZESCO, World Bank, Cities and Infrastructure forGrowth(CIG)Zambia,andvariouslenders.The meetingincluded feedbackfrom ZESCO MD,supportedbyCIG Zambia, on the sustainabilityoftheinitiativesbeingimplementedtoensurenancialsustainability. This included feedback on the devel-opment of a 10-year rolling strategic plan (2022-2031). Feedback was also provided on the progress madetowardsitsdebtreductioneorts,leadingtoasignicantreductioninarrearstoIndependentPowerProducers(IPP).Theutilitycontinuestoapplymoreprescribedoperationalcostcontainmentmeasures,positivelyimpactingZESCO’snancialposition.The10-year rolling strategic plan (2022-2031) has sub-sequently been published by ZESCO.Discussions were also held on the progress related totheimplementationofcost-reectivetaris,withZESCOsubmittingitstariapplicationtotheERBforveyearsunderaMulti-YearFrameworkTaristruc-ture. The ERB Board announced new electricity pric-es,whichcameintoeectonthe1stofMay,2023.ZESCO Managing Director Eng. Victor Mapani gives an update on ZESCO’s progress on its turnaround strategy at a meeting with the lenders convened by the Minister of Energy

GET FiT Zambia | Annual Update 202315Post-stakeholder working group meeting. Present at the meeting were: Presidential Delivery Unit, Ministry of Finance, Ministry of Ener-gy, Ministry of Justice, ZESCO, Energy Regulation Board, CIG Zambia, GET FiT Secretariat and Trinity LLPFollowingthemeeting,somelendersexpressedin-terestinsupportingnancingthe120MWGETFiTZambia Solar PV projects and supporting the gov-ernmentinmeetingtheenergyshortages,notingtheprogressmade,includingonthedebtrestructuring,despite it not being fully concluded. This support enabled the GET FiT Secretariat to work with ZESCO and the Ministry of Energy to ad-dress specic requirements that could enable thelenders to present the projects to their respective committees for approval. Following positive con-versationswiththelendersandsuccessfulbidders,theyearwasclosedowiththegovernmentstake-holder working group meeting in December 2023 tonalisetheGETFiTZambiaprojectagreements.Notably,thissessionalso featuredapivotalmeet-ingchairedbythePermanentSecretary–TechnicalServices,MinistryofEnergy,engagingwithprojectlenders to navigate the way forward. Through these meetingsandinterventions,theprospectstounlocknancingfortheGETFiT120MWSolarPVprojectsin the course of 2024 are now positive.Staying on course andkeeping the projectactive,despitechallengesfacedatthetime,hasthusprov-en valuable as it enables relatively fast mobilisation of project resources once lenders are secured. This could providesignicant lead-time benets,espe-ciallyifconsideredinthecontextoftheurgentneedfor power in Zambia and across the region.

16Solar PV and Small Hydropower Tender StatusTimeline showing the most important milestones which have been completedforthetwotenderstodate,andtheenvisionedtimelinefor 2024through2026.20192020-2022202320242025-2026Covid19impact+nancierssuspend funding. Programme implementation put on hold.Award of Solar PV projects and SHP prequalicationProgramme milestones and options for programme successUnlocking Lender InterestSecuring FundingFinancial close and project implementation  120 MWac Solar PV granted development rights by MoE  Concluded feasibility studies (Microgeneration in 2022) and EPBs. ZEMA environmental authorisation obtained.  Secured line route & grid connec-tion point with ZESCO.  Mandating of lenders delayed due to the short term grid study.  Continued work on liquidity struc-turesensuringsectorbankability,and discussions with lenders.  Monitoring macro-economic progress and updating and demonstrating country progress to various lenders  Mandating Lenders  Finalise Solar PV due diligence  Signprojectagreements.(PPA,GCAandIA)  Achievenancialcloseandnoticetoproceed,SolarPVportfolio  Reachcommercialoperation,Solar PV portfolio

17GET FiT Zambia | Annual Update 2023Small Hydro Tender The initial launch of the SHP request for proposal (RfP) wasplannedfortheendoftherstquarterof2020.However,thelaunchwasputonhold,initiallyasaresultofCOVID-19andthereafterasaresultoflenders notifying the program about their intention to suspend funding to projects in the Zambia ener-gysector.TheRfPremainedonholdin2023,withthe prospect of only being revisited once successful bidders for120MW Solar PV have conrmed thatthey have mandated lenders and there is a clear pathwaytonancialclose.Thisdecisionwasmadebecause,untilprospectivenancierscommitfundingtoZambiaforthe120MWsolarPVprojects,thesituationforSHPdeveloperswillremainunchanged.Thus,theSecretariatcontin-uesitseortstoensurethatchallengesaddressedunder the Solar PV tender can be carried through to the SHP tender to ensure that it would be success-ful when implementation becomes viable. In order to increasethe available nancingfor theSHPtender,theSecretariatactivelyexploredcollab-oration opportunities with donor entities. The bene-tofbroaderdonorcollaborationhasthepotentialto enable the commencement of the SHP tender through shared implementation costs across vari-ous donor initiatives and leveraging of grant fund-ing.Furthermore,suchcollaborationsmightreducethe Viability Gap Funding (VGF) requirement if devel-opmentcostsarenancedthroughgrants.Advoca-cy has thus not been limited to the 120 MW Solar PV projects but also the SHP programme.The GET FiT Secretariat has maintained commu-nication with developers who were prequalied toparticipate in the SHP tender, ensuring they arekept abreast of all key developments pertaining to the program. Developersprequaliedunder theGET FiT Zambia Programme currently hold a total of forty-four (44) feasibility study rights granted by the Ministry of Energy to conduct feasibility studies for small hydropower projects, which are reservedfor procurement under the GET FiT Zambia Pro-gramme. Zambiahassignicantpotentialforgeneratingelec-tricity through small hydropower projects. By exe-cuting these projects, the nation can harness thispotential to strengthen energy security and estab-lish a favourable investment framework for small-scale renewables, which in turn will contribute toeconomic development. MonguSolweziNdolaChomaKabweLusakaChipataDemocratic Republic of the CongoAngolaBotswanaZimbabweTanzania ZambiaMalawi Site with allocated FSR(Larger bubble indicates larger size)ChinsaliKasamaMansa

18Technical AssistanceTechnical AssistanceGET FiT Zambia aspires to more than being a vehicle to procure and develop energy projects in Zambia. The overall objective of GET FiT is to create a lasting impact in the sector through improving the overall investment framework for renewable energy. The close involvement of relevant government institutions in implementing the programme and providingTAenablesexperienceandcapacitybuilding.Thisway, GET FiT shall contribute to the continued development of renewable energies after the programme implementation period.The TA components of the GET FiT toolbox aimto boost institutional capacity and enable a trans-parent regulatory framework for private sector par-ticipation in developing the country's renewable energy resources. The TA Facility consists of inte-grated capacity building through the program's im-plementation and dedicated TA initiatives. So far,GET FiT has contributed to establishing a renew-ableIPPframework,developingaShort-TermGridDevelopmentplan(STGD),anopenaccessmarketstructure, rules, and regulations and transmissionand distribution pricing methodology to enable the open access regime in the sector. InclosecollaborationwiththeMoEandothermainstakeholders,GETFiTactivelyidentiesopportuni-ties and synergies with related initiatives in Zambia targeting improved framework and investment con-ditions. A description of the work conducted and planned undertheOpenAccessMarket,theShort-termGridDevelopmentPlanandGISimplementationispro-vided below. TA activities provided through GET FiT ZambiaTECHNICAL ASSISTANCEGrid studies for integration of renewables (completed)IntegratedCapacityBuildingbyProgrammeImplementation Consultant (ongoing)Legal advisory related to the GET FiT Solar PV Portfolio (ongoing)Open access market rules and regulations and transmission and distribution pricing methodology (ongoing)GISImplementation(planned)

GET FiT Zambia | Annual Update 202319Open Access Market In 2019, the Government of Zambia launched thenew National Energy Policy (2019). The new Ener-gy policy facilitated the enactment of the Electricity Act No.11 of 2019 and the Energy Regulation Acts No.12 of 2019. The new Acts have made provision for Open Access to transmission and distribution networks to facilitate power trading between gener-ating companies and end-users. However,therearecurrentlynoregulationstogov-ern the open access regime. Before nalising theregulations,aprocesshasbeenundertakentoen-sure that the open access regime operates fairly and transparently. An appropriate market structure anddesign, together with rules thatwould governthemarket,isrequired.TheERBwas,therefore,taskedwithdevelopingthemarket structure and associated open access rules and regulations and creating a transmission and distribution pricing methodology to facilitate the open access market in Zambia. Through the GET FiT TAFacility, technical assistanceis provided tothe ERB to support them in the development of this open access market framework. GIS ImplementationAspartoftheTAFacility,GETFiTisalsoassistingtheOPPPIwiththedevelopmentofaGIS-basedplatformto facilitate the digitalisation of the feasibility study rightsprocess.OPPPIplaysacentralroleinthispro-cessandaimstoimprovetheapplication,approval,and monitoring process of renewable energy project developments.TheaimistoestablishaGIS-basedplatform containing the most up-to-date information about renewable energy projects in the pipeline. This will also facilitate the management of feasibility study rightsissuedtovariousdevelopers.Inadditiontothevalue theGIS platform represents for internal port-foliomanagement,itcanalsobeanecienttoolforimproved access to information for various market actorsinterestedintheZambiaenergysector.Imple-mentation is now planned for 2024. Open Access Stakeholder Consultation

20OtherGETFiTInitiativesGET FiT Uganda was the rst roll-out of the GETFiT programme. It is designed to leverage privateinvestments into renewable energy generation pro-jects in Uganda. The programme has facilitated a portfolio of 17 small-scale renewable energy pro-jects promoted by private developers with a total installed capacity of 158 MW and a planned yield of 765 GWh of clean energy production per year.GET FiT Uganda has been developed by the Gov-ernment of Uganda and the Electricity Regulatory Authority (ERA) in close cooperation with the KfW Development Bank. GET FiT is being supported by theGovernments of Norway, the United Kingdom,Germany,andtheEuropeanUnion(EU). All of the 17 projects, including small hydropow-er, solarPV, and biomassprojects, are operationalsince2021.Withthisachievement,GETFiTUgandahas demonstrated its unique ability to attract private sectorinvestments,leveragingoverUSD455millioninprivateinvestments.Furthermore,theprogrammehas contributed to the local economy by creating over14,000jobs(FTEs).Asprogrammeactivitieswillcometoanendin2024,themainfocuswillremainon addressing deemed energy challenges in the GET FiTportfolio,andassociatedgridimprovements.For more information on GET FiT Uganda, pleasevisit the website www.gett-uganda.org.Other GET FiT InitiativesGET FiT Uganda GET FiT Zambia | Annual Update 2020 Hydropower Bagasse Solar PVKakira CHPSiti I SHPSiti II SHPWaki SHPNkusi SHPSindila SHPNdugutu SHPRwimi SHPNyamwamba SHPNyamagasani I + II SHPsKyambura SHPKikagati SHPMuvumbe SHPLubilia SHPTororo Solar PVSoroti Solar PVRWANDATANZANIAKENYADEMOCRATICREPUBLICOF THE CONGOSOUTH SUDANUgandaLAKE VICTORIALAKE ALBERTLAKE EDWARDGET FiT Uganda project portfolio

GET FiT Zambia | Annual Update 202321GET FiT creates an opportunity for Mozambique to harness its largely untapped renewable energy (RE) potential by leveraging private sector participation. Building on experiencefrom Uganda andZambia,the Programme will provide support to un-locking investments in RE projects by improving the private investment framework conditions. GET FiT Mozambique promotes various incentives to leverage private investments for RE projects with highsocio-economicimpacts.Combined,theGer-man Government and the European Union through KFWhavecommittedgrantsofuptoEUR68milliontotheGovernmentofMozambique,aimingatlever-aging additional private investments of at least EUR 100 million for the following three components of GETFiTMozambique:  GETFiTMozambiqueI:Solar PV plus storage, grid connected; tender preparations ongoing (nancedbyGermanCooperation)  GETFiT Mozambique II: At least 25 MW hydro power, on-grid connected: implementation plannedtocommencein2024(nancedbytheEuropean Union within the Green Deal Team Eu-rope Initiative for Mozambique, in line with theEU Global Gateway initiative)  O-gridcomponent(GreenPeople’sEnergyforAfrica: Mozambique): Rural mini-grids, com-bined up to 3 MW; tender preparations ongoing (nancedbyGermanCooperation)Programme context:The Government of Mozambique (GoM) aims to achieve universal energy access by 2030, facingchallengessuchaslowelectricationratesandlowpowersupplyreliability.Increasedprivatesectorin-volvement is considered a key element in addressing these challenges but are constrained due to eco-nomic weakness and investment risk perception. The GoM is enacting several reforms and measures toattractprivateinvestment,includingaPPPLaw,establishment of the Autoridade Reguladora de En-ergia(ARENE),andelectricitylawrevisions.Despiteprogress,critical risks persist, includingregulatoryuncertainties,inadequate taris,highgridconnec-tioncosts, andlackof standardizedprocessesforIndependentPowerProducers(IPPs).GETFiTMo-zambiqueisdesignedtospecicallyaddresstheserisks, thereby facilitating increased private sectorparticipation and boost power production and elec-tricity supply capacity.Similar to the GET FiT programmes in Zambia and Uganda,theprogramme'stoolboxincludesseveralinstruments to support the development of the en-ergysectorinMozambique.Inthemini-gridscom-ponent, there is also a Productive Use of energypromotioncomponent,aimedtostimulateeconom-ic activity in the targeted areas. ForfurtherinformationaboutGETFiTMozambique,please visit https://www.gett-moz.org. GET FiT Mozambique

22OutlookOutlookHavingsecurednancierswhohaveexpressedinterestinnancingthe120 MWGETFiTsolarPVprojects,theGETFiTSecretariatlooksforwardtoworkingtowardsachievingnancialclosein2024andsubsequentlypavingthewayforcommercialoperationdateby2026.Againstthisbackdrop,thefocusfor2024willbetocapitalise on the progress made during 2023. Par-ticular focus will be on ensuring that the successful bidders sign mandate letters and project agree-ments and that lenders commence due diligence. Some of the GET FiT Secretariat’s activities will focus on providing support to the due diligence pro-cess,whererequired,toenabletheachievementofnancialcloseby2024.Inaddition,thePIC’sfocusandeortswillalsoslowlybedirectedtowardstheSHPportfolio,includingagreeingandnalisingtherevised timelines with key stakeholders for launch-ing the tender and seeking opportunities to collab-orate with other donors to increase the available grant funding for the SHP programme.Focus during 2024 will also be on the implementa-tionofthekeyinitiativesrelatedtotheGISplatformas well as the Open Access Market Framework. A successful outcome of GET FiT Zambia has the potential to make Zambia more resilient in tackling the impact of climate change. With a portfolio ge-ographically spread across the country and repre-sentingdierentgenerationtechnologies(SolarPVandSmallHydropower),theprojectscancontributetoreducingthenegativeimpactofexternalshocks,such as the droughts experienced by the countryand the Southern African region. The clear ambition for GET FiT in 2024 is to come one step closer to the programme outcome target of diversifying the energy mix by bringing online120 MW of Solar PV projects and improving frame-work conditions for private investments in on-grid renewable energies up to 20 MW. This will enable a foundation to be set for further development of the SHP portfolio of projects as well as future private sector projects in Zambia.

GET FiT Zambia | Annual Update 202323GET FiT ZambiaAnnual Update 2023This report and all its contentsincludingguresandgraphs are produced by Multiconsult.multiconsult.noCredits:Page4:AJ_Watt/GettyImagesOtherphotos:MulticonsultGET FiT Secretariatc/o Multiconsult Norge ASEnergyRegulationBoard–Main BuildingGroundFloor–Room101Danny Pule RoadLusaka,Zambiainfo@gett-zambia.orgMulticonsult Norway– HeadquarterNedre Skøyen vei 20276OsloNorway+47 21 58 50 00energi@multiconsult.noKfWMarcoFreitag,PrincipalProjectManagerKfW BankengruppeLAd4–InfrastructureSouthernAfricaPalmengartenstr. 5-960325FrankfurtGermanyThe People at Work forGET FiT ZambiaThe programme is mainly carried forward by the GET FiT Zambia Secretariat in Lusaka and the Zambian governmental institutions Department of Energy (DoE) and Ocefor Promoting Private Power Investment(OPPPI). The picture to the left showsrepresentatives from the GET FiT Secreta-riatandtheDoE.Fromlefttoright,backtofront Agnelli Kafuwe (DoE), Dailesi Njobvu(GETFiTSecretariat),JudithRaphael(GETFiT Secretariat), Brian Siakweenda (DoE),Isaac Soko (DoE) and Allan Chivunda(DoE). Other representatives who are not in the picture include David Wamulume (DoE), Shuko Zyambo (OPPPI), MisheckMubuyaeta(OPPPI)andDavidPhiri(OPPPI).KfW,inclosecooperationwiththeZambianMinistryofEnergy,isresponsiblefortheimplementationofGETFiTZambia,supportedbyMulticonsultasProgrammeImplementationConsultant:Marco FreitagKfWPrincipal Project ManagerMari Soe Brelin FuruMulticonsultProject ManagerArnold Simwaba Department of EnergyDirectorJudith RaphaelMulticonsultResident Director