Ever since the Government opened up the mining industry to foreign investment in 2000, it has grown tremendously and currently consumes approximately 50 per cent of the country's generated capacity.
Furthermore, the success of the mining industry has rippled into other industries such as manufacturing, creating a plethora of opportunities for the electricity industry.
New analysis from Frost & Sullivan (energy.frost.com), 2010 Updated Overview of the Zambian Electricity Industry, finds that the industry's contribution to the country's GDP was approximately $1.30 billion in 2009 and estimates its contribution to GDP to reach $2.57 billion in 2015.
"Robust industrial growth and consequently, the higher need for electricity have brightened the prospects of the country's electricity industry," says Frost & Sullivan Energy & Power Systems Research Analyst Salima Zyambo.
Despite these market boosters, low foreign direct investment (FDI) and electricity tariffs could restrict the market's expansion. The fast-paced growth of Zambia's economy is expected to cause power demand to outstrip supply, which will make it imperative to increase the country's installed capacity.
Further, Zambia Electricity Supply Corporation's (ZESCO's) inability to generate funds internally due to the sub-economic electricity tariffs makes the state utility heavily dependent on FDI for power infrastructure construction projects. Conversely, the reduced tariffs deter foreign investors from investing in construction projects, which stalls installed capacity enlargement projects.
"Increasing electricity tariffs and further improving investment incentives for potential investors will improve FDI inflow into the country," notes Zyambo. "Providing potential investors with inducements and raising tariffs such that they are cost reflective will go a long way in attracting the much-needed FDI."
2010 Updated Overview of the Zambian Electricity Industry is part of the Energy & Power Growth Partnership Services program, which also includes research in the following markets: Strategic Analysis of the Zambian Electricity Industry and Strategic Analysis of the Ugandan Electricity Industry. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
If you are interested in more information on this study, please send an email to Christie Cronje, Corporate Communications, at christie.cronje[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.
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2010 Updated Overview of the Zambian Electricity Industry / M5FB