By: Dominic Goncalves - Advisory Partner for Energy Strategy at Cresco Project Finance, Founder & Director of Naviara Energy

Few African power markets are undergoing as much structural change as Zambia in 2026. A combination of macroeconomic stabilisation, mining-led electricity demand growth, open access policy, regional power market integration and lessons learned from the 2023–2024 drought has created a compelling environment for renewable energy investment.

For developers, lenders, infrastructure funds and corporate offtakers, Zambia is increasingly emerging as one of the continent’s most attractive markets for utility-scale solar, wind, battery storage and energy trading opportunities.

Zambia may become Africa’s leading market for dispatchable renewable energy – replacing drought-exposed hydro generation and diesel usage with firm renewable capacity to meet rapidly growing mining demand, regional electricity trading opportunities and market liberalisation.

Economic and Country Risk Improvements

In 2020, Zambia defaulted on its debt. Zambia completed its IMF Extended Credit Facility programme in early 2026 and has an improved debt position. Zambia’s sovereign credit rating was upgraded from distressed in 2023 to a stable-to-positive outlook in 2025.

That said, key risks remain: Zesco creditworthiness, FX convertibility and currency volatility, transmission constraints and the evolving implementation experience of open access and merchant revenue streams. Fiscal discipline is required and Zambia will face presidential and parliamentary elections in 2026.

However, global demand for copper and copper pricing highs have boosted export revenues in 2025 and early 2026, enabled strengthening of the kwacha and tampered downward the double-digit inflation experienced since Covid.

Zambia is targeting to expand its copper production from 890,000 tonnes per year in 2025 to up to 3 million tonnes per year by 2031, as some of the world’s most strategically important Critical Minerals reserves are being mined and developed in Zambia’s Copperbelt – all requiring stable, affordable and ideally renewable – electricity production.

Energy Market Drivers – a crisis creates opportunity

The drought of 2023-2024 exposed Zambia’s deep dependence on Hydro, for 80% of its electricity supply.

The 2023-2024 drought led to a 50% reduction in hydro generation, causing a load-shedding crisis and reliance on diesel for 8-10 hours a day or more in some cases at its peak. The need to diversify from hydro-based and diesel-based power supply for both affordability and energy security has created an innovative market for solar and batteries, as well as wind, and energy trading initiatives.

Zambia plays a central role in SAPP, the Southern African Power Pool. Some of the world’s largest and most strategic mining loads in the Copperbelt and across the border in the DRC – producing Critical Minerals – require stable power and this has warranted the development and design of baseload, dispatchable renewable energy projects.

Innovative Project Approaches

At Ivanhoe’s Kamoa-Kakula copper complex across the border in the DRC, CrossBoundary Energy is developing a 233MW Solar + 526MWh BESS to provide a 30MW Baseload Renewable ‘block’, of dispatchable power to the mine day and night – designed to provide 95% availability of renewable energy. Such an oversizing of renewable energy capacity and equipment would have been considered unfeasible several years ago – however due to the capex cost reduction of renewables, power quality improvements of batteries and grid-forming inverters, and the increased cost and reduced energy security from hydro and fossil fuels – there is now a commercially viable business case for dispatchable or firmed renewable power.

Other power users in Zambia are seeking similar solutions – not only mining but agricultural, commercial and industrial operations – who are no longer willing to rely on diesel pricing and seasonal hydro risks for the energy security of their business.

Zambia has seen two merchant solar power plants financed – among the first utility-scale merchant solar projects in Sub-Saharan Africa without traditional long-term utility PPAs. Energy trading and aggregation in SAPP has been pioneered by Africa GreenCo and now a wave of IPPs and developers from South Africa are racing to become market participants in SAPP – driven in part by the implementation of SAWEM, the wholesale energy market in South Africa currently being set up.

SAWEM is preceded by SAPP, which has an established (though historically small) day-ahead market and increasing transmission connectivity enabling solar, wind and battery storage to be traded. Such energy trading and portfolio aggregation creates a number of opportunities for both offtakers and IPPs as well as traders, aggregators and intermediaries – able to offer financial energy market instruments and virtual firming products as well as a physical stack of power generation and storage technologies to offer power on a market that is increasingly rewarding when clean power is delivered – ensuring that renewable energy is no longer variable, but is stable, dispatchable and can compete with baseload.

As of mid-2026 Zambia is increasingly attracting attention from developers, lenders and investors – where the world’s most important critical minerals mines are increasingly being powered by baseload solar, wind and battery facilities – with a thriving energy trading market under development.

As of mid-2026 in Zambia, individual project developers, energy traders and aggregators, industrial offtakers and lenders, and government stakeholders are preparing innovative solutions that address similar challenges: creditworthiness, bankability enhancements, dispatchable clean offtakes.

Innovative New Procurement Approaches

Stanbic Bank Zambia is under preparation of the ZAMWatt procurement programme in SAPP – leveraging open access frameworks under a multiple IPP generator and multiple offtaker solution – including both Zesco and mining loads. The ZAMWatt Programme is designed to reduce single buyer dependency and reduce offtaker risks by aggregating demand across multiple mining offtakers. Reducing financing risks and political risk should enable a quicker route to market for IPPs. ZAMWatt may be followed by ZimWatt in Zimbabwe and KWatt in the Katanga Province of DRC.

In May 2026, the Ministry of Energy in Zambia released its Competitive Procurement Framework for Private Sector Investment in Renewable Energy document. The new framework aims to usher in REIPPPP-style bidding windows – a competitive procurement process and standardized documents – replicating the successful implementation of such a programme in South Africa. The first two bidding windows are proposed as 2026, and 2027-2030.

Importantly, the Competitive Procurement Framework document highlights two groundbreaking, innovative new instruments to unlock country risk and utility offtaker creditworthiness in emerging markets.

The Renewable Energy Liquidity Mechanism (RELM) is an innovative new instrument to designed reduce utility payment risk and improve bankability without heavy reliance on sovereign guarantees.

The Carbon Feed-in Programme (CFIP) is an innovative global climate financing instrument backed by the Government of Norway to provide a 10-year premium to incentivize solar + BESS or  dispatchable clean energy or decarbonised firming power. Eligible projects must demonstrate additionality (that there is an existing financing gap) and are required to provide a portion of energy storage capacity. The CFIP is therefore designed to enable projects with storage to obtain an additional premium of a revenue stream backed by a AAA-rated buyer, thereby increasing the deployment of dispatchable solutions.

It would seem that a combination of private sector innovation – by developers, traders, lenders and offtakers – encouraged by public sector participation and enablement – is unlocking the future of dispatchable renewable energy in Zambia, parts of which may be seen as a lighthouse and a testing case for emerging markets, not only in Africa but around the world.