June 2019 – Leaders in Zambia have set into motion a profoundly important effort to expand access to affordable, reliable electricity. For isolated and remote communities, officials believe that off-grid systems will serve as an essential component to increasing access to modern electricity services in Zambia.

The Zambian Energy Regulation Board (ERB) is taking a leading role in attracting investment into the country’s burgeoning off-grid power sector by taking steps to create greater certainty within the development process. Recently, the ERB launched a pilot program for an off-grid regulatory framework, which directly answers a need identified by investors looking to develop off-grid systems in the country.

Specifically, potential investors and developers have indicated that the lack of a clear and predictable off-grid regulatory framework is a major obstacle to investment in the sector in Zambia. Off-grid development is critical to Zambia’s electrification goals because extending existing infrastructure from urban areas will not be technically or financially feasible, given that many areas of the country feature markedly low population density.

Thanks to support from USAID and Power Africa, NARUC organized a peer review of the ERB’s Draft Regulatory Framework for Off-Grid Systems in August 2018. During the review, experts from the U.S., Kenya, and Tanzania met with ERB participants to identify gaps, develop recommendations for strengthening the framework and build the ERB’s internal capacity to serve as an informed stakeholder going forward.

NARUC experts also helped ERB staff compile a “key considerations” document, providing a working reference for ERB staff working with other electricity sector stakeholders on the regulatory framework.

Based on discussions at the peer review, the ERB submitted specific comments on the draft framework to the ERB Board. The Board then approved the revised framework for piloting, incorporating the recommendations made by ERB staff and supported by NARUC experts.

The pilot framework provides a basis for Zambia to “road test” various regulatory interventions, resulting in lessons learned that could be applied going forward. By establishing guidance related to licensing, tariff setting, and technical standards, it will provide increased clarity for off-grid developers and investors.

Maimbolwa Matale, Monitoring and Evaluation Officer at ERB, said that the in-depth discussions and recommendations made during the peer review are enabling ERB staff to play an active role in defining the scope of off-grid regulation in Zambia and develop a new framework geared toward private sector participants.