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GET FiT Zambia Annual Update 2021

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2021Annual UpdateYear in review

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GET FiT Zambia | Annual Update 20211Table of ContentsMessage from the Ministry of Energy 2Acknowledgements from the Permanent Secretary 3About GET FiT Zambia 5GET FiT Zambia – Reections of the Year in Review 8Solar PV 10Small Hydropower 12A Potential “Microgeneration” Window 14Creating Lasting Impact Through Technical Assistance 15Other GET FiT Initiatives 17Outlook 19

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Zambia’s goal of becoming “A Prosperous Midd-le-Income Nation by the Year 2030”, as outlined in the Vision 2030 plan, can be achieved by sus-taining high rates of economic growth. There is a link between electricity consumption and economic growth, meaning to attain high rates of economic growth, there is need for increase in electricity con-sumption and, therefore, the need to increase elec-tricity generation and supply. In Zambia, low rainfall resulting from climatic changes has aected elect-ricity generation, highlighting the need to diversify our electricity generation portfolio. The need for a diversied portfolio presents an op-portunity for the introduction of renewable energy technologies as well as the participation of more pri-vate sector players in the sector. The implementa-tion of Programmes like GET FiT Zambia is therefore valuable as it is designed to enable the entry of low-cost diversied energy sources onto the grid. The power that can be provided by the 120 MWac from the six awarded GET FiT projects can contribute in a meaningful way to alleviating the power decits that are still experienced from time to time. Beyond helping to alleviate power decits, GET FiT Zambia aims to have a greater impact in the Ener-gy Sector. Once these projects are completed, they will provide power at a very favourable tari, in fact far below the average cost of power from our cur-rent generation facilities. These low prices are result of the successful GET FiT Zambia Solar PV ten-der, which achieved the lowest price outcome ever achieved in a solar auction in Sub-Saharan Africa until that date. Thus, these projects have the poten-tial to make clean and aordable energy available to the country as well as to improve the economic situation of the sector. Additionally, GET FiT Zam-bia will leave behind a stronger, economically sound and climate-friendly energy sector in the long term.The delay in implementation of the programme’s Solar PV projects therefore has not gone unnoticed. The successful bidders of the projects have been making eorts to progress toward realising their pro-jects. Meanwhile, the developers that were pre-quali-ed developers for the Small Hydro tender have been waiting for the launch of the request for proposal. In the early stages of GET FiT Zambia implementa-tion, both the Secretariat and the Ministry devoted their eorts mainly to the procurement programmes at the core of the Programme. In 2021, however, more attention had been directed toward reaping the opportunities to create lasting positive impacts on the sector, represented by the Programme’s Technical Assistance Facility and the Grid Facility, which are other essential components of the GET FiT Zambia toolbox.In conclusion, the successful implementation will not only ensure the scaling up of low-cost renewa-ble energy, but it can also be a catalyst for unlocking private sector participation in the energy sector. This can further contribute to scaling up renewable ener-gy projects to meet demand, not only in Zambia but also the region and thereby ensuring that Zambia plays its role in contributing towards global achieve-ment of carbon neutral targets. Hon. Peter Chibwe Kapala, MP Minister of EnergyMessage from the Ministry of Energy2Message from the Ministry of Energy

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The Ministry of Energy wishes to express its deep appreciation to our partners who continue to support the GET FiT Zambia Programme. Sincere thanks to the German Government, through KfW, German De-velopment Bank who is providing nancial support in form of technical assistance, viability gap funding (VGF) and the Grid Facility, designed to ensure Zam-bia promotes private sector participation and diver-sies its energy mix through the implementation of low-cost renewable energy projects. We also thank the British Government, through the Department for Business, Energy, and Industrial Strategy (BEIS) for the technical assistance provided towards the fea-sibility study for a potential 5 MW Microgeneration Programme. On behalf of the Ministry, I wish to express a special word of thanks to the following line Ministries, Go-vernment Organisations, departments, and instituti-ons for their support:  The Ministry of Finance and National Planning, Ministry of Justice, Zambia Environmental Ma-nagement Agency (ZEMA), Water Resource Management Agency (WARMA), Energy Re-gulation Board (ERB), the Citizens Economic Empowerment Commission (CEEC), the Rural Electrication Authority (REA), National Heritage Conservation Commission (NHCC).  The Department of Energy, Department of Plan-ning and Information, the Procurement and Supplies Unit and the Oce for Promoting Pri-vate Power Investment (OPPPI) for your diligent work and the support you are providing to the GET FiT Zambia Secretariat.  The ZESCO Managing Director, Directorates, Managers, and Working Group team members, for the support you are providing to ensure the 120 MW solar PV projects achieve nancial close and that the Small Hydro Programme and Microgeneration programmes also achieve suc-cessful implementation.The ultimate success of the programme will depend on the commitment and invaluable contributions from all stakeholders. We look forward to continued support and contri-bution as we work towards the successful imple-mentation of all initiatives under the GET FiT Zambia programme. Francesca Chisangano Zyambo Permanent Secretary Ministry of Energy Acknowledgements from the Permanent SecretaryGET FiT Zambia | Annual Update 20213

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Contributing toa climate-friendlydevelopment pathand sustainablegrowth in ZambiaImpact Statement

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GET FiT Zambia | Annual Update 20215GET FiT Zambia is the implementation Programme for the Government of Zambia’s REFiT Strategy that aims to facilitate private sector invest-ment in small- and medium-scale Renewable Energy (RE) Independent Power Projects (IPPs) in Zambia.About GET FiT ZambiaThe implementation is supported by KfW, the German Development Bank, on behalf of the German Govern-ment. The Ministry of Energy is the Project Executing Agency (PEA) responsible for the Programme. The GET FiT Secretariat (led by Multiconsult) was appo-inted in 2018 to work with the Department of Energy (DoE) to implement the Programme.The Programme is motivated by acknowledging the wide range of positive, sustainable eects that the development of RE projects can have for economic and social development and the strong potential for such projects in Zambia. The realisation of up to 205 MW of renewable energy capacity is at the heart of the Zambian REFiT strategy. Additionally, GET FiT Zambia aims to boost institutional capacity and improve the investment framework for private sec-tor participation in the Zambian power sector. A key feature is to ensure transparency in regulatory and commercial processes and strengthen power grid operations as a basis for integrating even more rene-wable energy in the future. GET FiT Zambia is the second roll-out of the GET FiT concept, successfully piloted in Uganda, where it achieved approximately 160 MW of installed re-newable energy capacity via 17 projects. GET FiT Uganda established a track record for private sec-tor participation and helped transform the Ugandan energy regulator into a role model in Africa. GET FiT Zambia has been designed based on various lessons learned and on-the-ground experience in Uganda – while considering the country-specic circumstances and barriers to private sector invol-vement. GET FiT Zambia is implemented by the Ministry of Energy (Department of Energy), in collaboration with KfW, the German Development BankThe objectives of GET FiT Zambia are:  Procurement of up to 205 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 geography) 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

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About GET FiT Zambia6Zambian context and prioritiesGET FiT contributionDiversied generation mixZambia is today heavily dependent on large hydro. Low cost generation expansionNeed for low-cost source of diversied energy generation while mitigating impacts of climate change.Decentralised power systemLarge and sparsely populated country. Dispersed generation will benet system expansion.Consistent long-term planningRepeated power shortages highlighting the need for sector investment and planning.Risk mitigationA need to diversify current and planned new energy sources.Installed RE capacity and IPP frameworkSolar and small run-of-river. Tested framework to benet country for years to come.Solar and hydro a part of least-cost mixLow prices for solar PV through reverse action and fair prices for small hydro through REFiT.Geographically dispersed portfolioUp to 15 projects to be implemented throughout the country supporting the energy system of the future.Gradual improvement and long-term benetsImplementation over several years to allow for consolidation of results.A small portfolio with large potentialComplementing the large hydropower in the power system. Small-scale IPP programmes can be rapidly scaled up or down.

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The GET FiT ToolboxGET FiT Zambia's tools are tailored towards current barriers in the Zambian power sector.Barriers GET FiT ToolsLack of credibility amongst investors that procurement eorts will result in executionIndividual small projects unable to attract appropria-te nancing and assosiated DDHigh cost of capital for renewable transition and new REFiTs yet untestedCapacity constraints for integration and operation of decentralised intermittent RESkills gaps and capacity constraints in becoming credible counterpart to investorsPROCUREMENT & TRANSACTIONThe GET FiT Programme is tasked with the procurement of new renewable generation capacity. The Solar PV Tender successfully concluded in April 2019 with award of a total of 120 MWac, while the tender for small hydropower projects has been on hold since 2020.DEBT & RISK MITIGATION FACILITYThe Risk Mitigation Facility will be implemented in close collaboration with African Trade Insurance (ATI) as an option for developers and nanciers. It combines ATI's existing Termination Guarantee insurance with a new short-term liquidity product (Regional Liquidity Support Facility) which was jointly developed by ATI and KfW.VIABILITY GAP FUNDINGGET FiT oers performance-based tari support for a limited portfolio of qualifying REFiT projects. In eect, Viability Gap Funding facilitates the entry of early movers from the private sector into the nascent renewable energy market in Zambia. GET FiT Zambia has not applied Viability Gap Funding toward solar PV projects.GRID FACILITYThe Grid Integration Component of the GET FiT Program consists of two dierent elements. GET FiT has provided advisory support to ZESCO regarding grid integration of solar PV into Zambia's national grid. GET FiT will also provide nancing for grid integration for select technologies, such as hydro.TECHNICAL ASSISTANCEGET FiT is providing capacity building programmes for key sector stakeholders as part of the Technical Assistance facility. Particular focus points of these programmes are project support for the small hydro portfolio, as well as grid integration of renewable energy into the Zambian grid.7GET FiT Zambia | Annual Update 2021 PROCUREMEN T & TRANSACTIONSDEBT & RISK MITIGATION FACILIT YVIABILITY GAP FUNDINGGRID FACILIT YTECHNICAL ASSISTANCE

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8GET FiT Zambia – Reections of the Year in ReviewBy the time of the launch of the 100 MW Solar PV tender, GET FiT Uganda had made signicant pro-gress and had started to have a tangible impact on the energy sector and the country. Despite the suc-cess in enabling valuable RE capacity to the Ugan-dan power system, it is acknowledged that GET FiT Uganda was by no means perfect: it had faced a few challenges during the rst ve years of imple-mentation. The key “Lessons Learned” from the implementation were analysed and published in a series of ‘Lessons Learned’ articles, all available at get These lessons from GET FiT Uganda were carefully considered in the design and implementation of the GET FiT Zam-bia solar tender, which targeted 100 MW of on-grid Solar PV. Their value was demonstrated when the tender achieved the lowest price of any Solar PV auction in Sub-Saharan Africa outside South Africa at the time. Unfortunately, sector bankability weakened in the period following the award. A challenging macroe-conomic situation was hard hit by the outbreak of COVID-19 pandemic and further worsened through 2020 and 2021. This has resulted in the need for debt restructuring and a debt relief package from the International Monetary Fund (IMF) and the World Bank. Lenders’ commitment to nancing the Solar PV projects has therefore not yet been possible, and Zambia has thus not been able to realise the bene-ts from these low-cost energy projects. Although, in hindsight, the timing of the tender launch may appear unfortunate, the information available at the time and the urgency of the matter made the timing appear ideal, and the outcome of the tender shows that the market actors shared the same optimistic outlook at the time. Specically, the lack of energy caused by the 2015-2016 drought had only years earlier led to purchasing of expensive emergency power to cope with several hours of load shed-ding. Through the outcome of the 100 MW tender, GET FiT, with the contribution of key Zambian sta-keholders, has demonstrated that it is possible for Zambia, through a competitive, well designed and eciently implemented bidding process, to procu-re low-cost energy. Therefore, with the impact of climate change and extreme weather predicted to occur more frequently in coming years and shorta-ges of power being experienced in the region, it is a shared view from our partners that the Programme objectives remain relevant. The year 2021 undoubtedly presented its own set of challenges, but also the opportunity to learn and adapt. The Programme proved its exibility to opti-mise resources by focusing on technical assistance during the period of low activity related to the Solar PV and Small Hydro procurement. Notable eorts and updates include: GET FiT Zambia – Reections of the Year in ReviewFollowing the success of the GET FiT Uganda Programme, GET FiT Zambia was launched in 2018.

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GET FiT Zambia | Annual Update 20219  The development of a short-term grid develop-ment plan to enable future integration of rene-wable energy projects, with a specic focus on areas with a high concentration of potential small hydro projects. The working group comprised the Ministry of Energy, ZESCO, Rural Electrica-tion Authority (REA) and the GET FiT Secretariat. The study was undertaken by the consultancy rm CESI SpA, which was appointed following the outcome of a tender undertaken by the GET FiT Secretariat (supported by the Ministry of Energy and ZESCO).  Technical support and advisory to the Energy Re-gulation Board (ERB) and Ministry of Energy in developing the Open Access Market Regulations.  The opportunity was also used to investigate other bankable o-take scenarios as an alterna-tive to ZESCO as o-taker. Given progress al-ready made on the Solar PV tender and based on feedback obtained from lenders, the other options considered were not found viable. Con-sideration may, however, be given to this option in the future as the open access market evolves and becomes more established. At the end of 2021, the renewed commitment by the Government of Zambia to address the country’s macro-economic challenges and ambitions to re-store the nancial sustainability of the energy sector is noted and welcomed from a GET FiT perspecti-ve. If these intentions materialise, it will set a strong foundation for successfully implementing the Pro-gramme objectives in 2022.

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10Solar PVAs highlighted in the GET FiT Zambia Annual Up-date for 2020, the ambition for 2021 was to ensure progress in the development of the six Solar PV pro-jects awarded under the Solar PV tender. The prices of the power to be provided from these projects were considered so favourable that it was agreed to go beyond the targeted 100 MW. The awards were thus given to three developers of projects which to-gether would provide 120 MW of generation capa-city to the Zambian grid. While the causes of the delay that was announced in 2020 have continued, the successful bidders of the six projects remained committed to the Programme and continued their eorts to advance the projects through 2021. Realising the projects remains of strategic signi-cance as it presents several dierent benets. Once successfully implemented, the Solar PV projects will be able to feed power into the grid at an average tari of 4.41 USc/kWh, which is much lower than the average tari in Zambia today. Further benets include the addition of 120 MW of climate-friendly power to the grid, and in light of the negative im-pacts of the load shedding on the economy, this is expected to provide a welcome relief to busin-esses. Maintaining ZESCO as the targeted o-ta-ker of the power, despite the persisting bankability challenges, is intended to ensure that the low-cost projects can provide benets for the whole popu-lation. This is also expected to have a positive im-pact on ZESCO’s nancial sustainability as it can help avoid ZESCO purchasing expensive power in times of energy shortage and provide the opportu-nity to sell power at a higher price in the Southern African Power Pool (SAPP) in case of excess energy in Zambia. Given the value that the Solar PV projects could re-present for the energy sector and the country, the Secretariat, together with the key Zambian stake-holders and KfW, has directed strong eorts to-ward the mitigation of risks and challenges causing the delays and enabling progress toward nancial close. GET FiT Zambia also continued to work clo-sely with the successful bidders, lenders, and other stakeholders to explore options that could impro-ve bankability and ensure the projects are back on track for successful implementation. Solar PVThe Solar PV tender was initiated at the outset of the GET FiT Zambia Programme and has been an essential part of the Programme ever since.

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11GET FiT Zambia | Annual Update 2021MonguSolweziNdolaChomaKabweLusakaMansaChipataKasamaChinsaliDemocratic 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

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12Small HydropowerSmall HydropowerA Small Hydro tender was planned in 2020 to follow up on the Solar PV tender success and to add 50 MW of hydro capacity to the portfolio. This was unfortunately postponed due to the outbreak of the COVID-19 pandemic.GET FiT Zambia has pre-qualied 30 developers of small hydropower projects, who were all eligible to apply for feasibility study rights (FSRs). A total of forty-four (44) FSRs were granted by the Ministry of Energy to 20 of these pre-qualied developers in 2020 and early 2021. The sites, with capacities that vary between 1 to 20 MW, are shown in the map below. The pre-qualied developers who hold feasibility study rights will be invited to participate in the GET FiT Zambia Small Hydropower tender. A moratorium has been issued until mid Q3 2022 with the hope that a clear pathway can be found for the continuation of the Small Hydro Programme. The rst round of the request for proposal (RfP), which targeted the procurement of up to 50 MW, was postponed in 2020, triggered by the outbreak of the COVID-19 pandemic. Given the decision by lenders to suspend the funding of all on-grid pro-jects, including the Solar PV project in Zambia, suc-cessful progress of the 120 MW Solar PV projects was considered necessary to pave the way for the continuation of the Small Hydropower tender. Given the prevailing situation as described for the Solar PV Programme and, taking into account the cost to further develop projects to a level of matu-rity allowing for participation in the GET FiT Zambia Small Hydropower tender, it was decided that it was prudent to hold back the launch of the RfP; at least until such time as lenders are able to resume fun-ding of on-grid projects in Zambia. It is the position of GET FiT Zambia that although the tari for the small hydropower will be higher than the taris achieved under the Solar PV tender, the small hydropower projects can oer other signicant be-nets to the country. Not only will they contribute to-ward geographical diversication, but they are also likely to provide a range of other social and econo-mic benets. These include increased infrastructure development, such as roads and the extension of the grid, in addition to the power plant. The aim of the tender has also been to exploit the electrication opportunities in the surrounding areas. Further, trade-os will also need to be considered in the context of the sector reforms underway in Zam-bia, including the Cost of Service Study (CoSS), the development of an Integrated Resource Plan (IRP) and the open access market rules and regulations. While the sector reform may present opportunities, it can also be expected to change the framework for private sector investments in Zambia, particularly small hydropower. Therefore, a key objective of the tender design will be to formulate a robust and inno-vative approach using the GET FiT tools such as the Viability Gap Funding (VGF) and the Grid Facility to ensure that projects can contribute to and assist the Zambian Government in oering increased access to aordable electricity.

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13GET FiT Zambia | Annual Update 2021Map of Zambia showing locations of potential hydropower plants with current Feasibility Study RightsMonguSolweziNdolaChomaKabweLusakaChipataDemocratic Republic of the CongoAngolaBotswanaZimbabweTanzania ZambiaMalawi Site with allocated FSR(Larger bubble indicates larger size)ChinsaliKasamaMansa

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14A Potential “Microgeneration” WindowA Potential “Microgeneration” Window2021 saw the continuation of the investigation of the feasibility of a 5 MW Microgeneration window.The Microgeneration window envisions a tender that would target up to ve 1 MW grid-connected solar PV installations on a single parcel of land and a single grid connection point. The goal is to design a tender that would pave the way for local develo-pers to build upon existing experience through the investment, ownership, and operation of renewable energy projects in Zambia. The REFiT strategy allowed for an allocation of 5 MW to be reserved for microgeneration projects as part of a response to concerns voiced by the Zambian private sector regarding the ability of local develo-pers to meet the stringent selection criteria set for competitive procurement Programmes such as the GET FiT Zambia Solar PV tender and the Scaling Solar Programme implemented by IFC. In 2021, KfW, with nancing from the United Kingdom Department for Business, Energy and Industrial Strategy (BEIS), commissioned a feasibility study to investigate the viability of a competitive tender for ve (5) solar plants with 1 MW installed capacity each, as an investment concept to targeting Zambian companies. The feasi-bility assessment focused on what would be required to ensure that small scale projects are viable and on how the tender should be innovatively designed to ensure competition and an optimal tari outcome.The feasibility assessment commenced with inves-tigations of potential sites that would be viable for developing the ve Solar PV projects totalling 5 MW installed capacity. The site investigations included assessing the land suitability, potential environmen-tal impacts, land ownership/leasing issues, and grid connection and operations. Possible nancing ar-rangements and lender requirements are still under consideration. The site assessment concluded with the selection of a site in Mongu, in the Western Pro-vince of Zambia, situated within the industrial yard owned by the Citizens Economic Empowerment Commission (CEEC).With the rst stage of the Microgeneration Concept Feasibility Study completed in 2021, the eventual decision to move to the nal design, mobilise -nance and implement this innovative tender will be made in 2022. This decision will be subject to care-ful consideration of whether favourable conditions are in place to ensure success and will, not least, depend on the status of the overall GET FiT Zambia Programme. Schematic presentation of the microgeneration site with ve solar PV installations: 1 MW solar installations in a 5 MW park

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GET FiT Zambia | Annual Update 202115Creating Lasting Impact Through Technical AssistanceGET FiT aims to create a lasting, positive impact by enabling a favourable framework for investments in renewable energy development. This includes establishing capacity to ensure that the energy sector develops along a climate-friendly path and contributes toward a sustainable energy future.GET FiT is more than a renewable energy procure-ment Programme, and the GET FiT Technical Assis-tance Facility (the TA Facility), managed by the GET FiT Secretariat, is specically put in place to provide technical assistance to this end. In close collaboration with the Ministry of Energy and other main stakeholders, GET FiT actively identies opportunities and synergies with other activities in Zambia to contribute to improved framework and in-vestment conditions. In light of the prevailing energy sector challenges, this sector-wide value proposi-tion has been a key focus area for GET FiT in 2021. Among a variety of capacity building and techni-cal assistance (TA) activities identied by the Pro-gramme, particular focus has been on two key TA activities: support in relation to market design and regulations for an open access regime; and the de-velopment of a short to medium term grid develop-ment plan. Technical Assistance 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)

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16Creating Lasting Impact Through Technical AssistanceOpen Access Market The Electricity Act No. 11 of 2019 made provision for “open access” to the transmission and distri-bution networks, with the objective of facilitating power trading between generating companies and end-use customers. Energy Regulation Board (ERB) was tasked with the development of the associa-ted open access rules and regulations and also to consider that a Transmission Pricing Methodology would be necessary to enable the open access mar-ket regime. Through the GET FiT TA Facility, techni-cal assistance was provided to the Energy Regula-tion Board. The assignment aims to recommend a market design, rules and regulations and the other stakeholders to consider the appropriate market structure, develop the market design and associa-ted market rules and regulations, as well as trans-mission and distribution pricing regulations.The rst phase of this support was completed in 2021, overseen by a Technical Committee and a Steering Committee. The development process in-cluded extensive stakeholder consultations related to the proposed market structure and the transmis-sion and distribution pricing methodology. The nal phase 1 reports outlined the agreed market design, and the pricing methodology was approved by the Technical Committee in December 2021. The pro-cess will continue in 2022 with the drafting of the rules and regulations to enable the implementation of the new market design and regime. Once implemented, it is expected that the open ac-cess market will contribute to the attractiveness of the Zambian market for a variety of market actors and aims to increase the eciency of the energy sector at large. The open market is benecial for both the power consumer as well as the power de-veloper, as consumers get the power at a better ta-ri and developers get a client directly. Short-term Grid Development Plan The successful realisation of the benets from new renewable energy generation relies on integrating the projects into the grid to enable the distribution of power to users. Thus, transparent and ecient grid planning is an essential condition for an increased share of renewable energy provided by IPPs sup-plying power to the grid. The assignment to develop a short-term grid development plan for Zambia was awarded to the consultancy CESI SpA and imple-mented in 2021.The focus of the study was to identify constraints and opportunities for technically feasible integration of future renewable energy projects. Particular at-tention was given to the North and North-western regions, where there is high potential for clusters of small hydro projects but where limitations of the grid infrastructure could represent a constraint to their development. The study also considered the electri-cation potential in these areas. The nal report was submitted and presented to all stakeholders in December 2021. The aim is to pro-vide a sustainable plan that contributes to favoura-ble conditions for developing renewable energy in Zambia. GET FiT Uganda was the rst roll-out of the GET

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GET FiT Zambia | Annual Update 202117FiT 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 (RE) projects, promoted by private developers and with a total installed capacity of 158 MW and a plan-ned yield of 765 GWh of clean energy production per year. GET FiT Uganda has been developed by the Government of Uganda and the Electricity Re-gulatory Authority (ERA) in close cooperation with the KfW Development Bank. GET FiT is being sup-ported by the Governments of Norway, the United Kingdom, Germany, and the EU.With the last three power plants reaching commer-cial operation in 2021, GET FiT Uganda has proven its unique ability to attract private sector invest-ments. The Programme has leveraged over USD 455 million in private investments. Furthermore, with a high level of construction activities, job creation from the portfolio is substantial – amounting to over 12,500 jobs (full-time equivalent). The sector impro-vement throughout the Programme implementation period is being recognised internationally, and ERA has been ranked "number 1" in the Africa Electricity Regulatory Index for four consecutive years1. For more information on GET FiT Uganda, please visit the website www.get 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 EDWARD1 FiT Uganda project portfolio

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18Other GET FiT InitiativesMozambique is generously endowed with renewable energy resources – with about 18 GW in hydropow-er potential and favourable conditions for electricity production from solar, wind and biomass. However, the country is still suering from electricity access rates of 40 %. Hydropower is the main source of electricity, with the majority coming from the IPP Ca-hora Bassa. Electricidade de Moçambique (EDM), the national utility, operates smaller hydro, gas and solar plants, and several projects by both EDM and IPPs are in process. The Government and EDM re-cognise the need to work with the private sector and alleviate challenges related to the under-capacity of energy infrastructure and weak security of supply to facilitate the investments that are required for Mozambique to achieve its ambitions of ensuring access to aordable and sustainable energy to its population and at the same time build its position as a powerhouse in the Southern African Region. The third roll-out of the GET FiT concept in Mozambique aims at improving the framework conditions for pri-vate investments in renewable energy – in support of a climate-friendly development, lower greenhou-se gas emissions and poverty reduction.The Programme is implemented over an initial four-year period and is expected to launch in 2022. At the core of the Programme is the procurement of generation capacity by IPPs, with the rst round tar-geting a reverse auction of up to 30 MW of Solar PV with storage. As in Zambia and Uganda, the Programme’s tool-box includes several instruments to support the de-velopment of the energy sector in Mozambique:1. Viability Gap Funding - Supplementation of the feed-in taris to a cost-covering level 2. Grid Integration Facility - Financing of grid connection costs for subsidised power genera-tion plants from private developers (IPPs)3. Risk Mitigation Facility - Risk Coverage Gua-rantee Facility for IPPs4. Capacity Development Facility - Capacity buil-ding at the partner institutions through technical support and supervision of the IPPs.The Government of Mozambique and KfW signed the Financial Agreement for the Programme in 2019. The German Government has provided a EUR 25 million grant for its implementation. The Ministério dos Recursos Minerais e Energia (MIREME) is the Programme Implementing Unit.In 2021, MIRIME procured the Implementation Con-sultant, paving the way for the launch of GET FiT Mozambique in mid-2022.For further information about the Programme, please visit the website https://www.get GET FiT Mozambique

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GET FiT Zambia | Annual Update 202119OutlookBy the end of 2021 and into the rst quarter of 2022, Zambia presented a much-improved landscape for progress to be made towards successful implementation of the Programme.GET FiT Zambia remains well aligned with the Go-vernment of Zambia’s objectives of ensuring and creating a competitive, transparent framework for infrastructure development. With the 205 MW GET FiT Programme being established with this as its platform, it is well-positioned to contribute towards increased power production. This creates a positive impact not only with regard to increased aordable energy for Zambia’s population but also contribu-ting towards other objectives, such as facilitating growth in the mining sector and positioning Zam-bia as a power export hub in the region. After the commissioning of the initial targeted 150 MW, it is estimated that the Programme will oset 500,000 tons of GHG emissions every year. The activities undertaken by GET FiT over the last few years, whilst implementation has been delay-ed, have helped to set an important foundation for ensuring smooth implementation once favourable conditions that will attract nancing are in place. Specically, an improved economic landscape, with successful debt restructuring and the establishment of an IMF debt relief package, will be a prerequisite to ensure that project lenders can recommit to fun-ding projects in Zambia.

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20OutlookThe Secretariat, in collaboration with the main Pro-gramme stakeholders, will therefore focus on the following activities for 2022 and beyond: 1. Continue the engagement with various stake-holders and prepare the groundwork for ena-bling the Solar PV projects to be ready to advance to nancial close.2. Establish an appropriate foundation and ap-proach (taking into account the outcomes of the sector reform) that will inform the way for-ward on the SHP tender design once nancial close for the Solar PV projects is achieved.3. Extend technical assistance and advisory to the Energy Regulation Board and Ministry of Energy with support in the development of the Open Access Market Regulations. 4. Utilise the opportunity created by the new regu-lations to investigate how the GET FiT Zambia procurement framework can be used and/or adapted for use under the legislative framework to ensure ecient and transparent procurement of future renewable energy projects. 5. Continue to collaborate with other TA Program-mes to manage cross-impacts and ensure alignment with the respective outputs and the recommended market rules and regulations. The identied TA includes the development of the Integrated Resource Plan (IRP) undertaken by CIG Zambia and funded by UK-AID and the Multi-year tari framework (MYTF), undertaken by the EU through the Increased Access to Electricity and Renewable Energy Production (IAEREP) Programme. 6. Continue to extend support to strengthen the institutional capacity of the Ministry of Energy, in particular with the development of a digitali-sed framework for issuing Feasibility Study Rights in line with the legislative requirements.The GET FiT Zambia Secretariat will continue to clo-sely monitor global and national developments in the energy sector and the economy, as we remain acutely aware of their importance in ensuring that the Solar PV projects can be realised at benecial tari levels. This is also expected to pave a clear pa-thway for the continuation and the eventual launch of the rst round of the SHP tender.With renewed commitment expressed by the Minis-try of Energy and ZESCO towards the Programme and the renewed optimism in the country following a peaceful election, the outlook for successful im-plementation of GET FiT Zambia is now considered positive. Our message at the end of 2021… We con-tinue to aim for success, so stay tuned!

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GET FiT ZambiaAnnual Update 2021This report and all its contentsincluding gures and graphs are produced by Multiconsult.multiconsult.noCredits:Front Page: Building EnergyPage 4: AJ_Watt/Getty ImagesPage 10: Access PowerOther 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

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