Zambia has set a new benchmark for low cost solar energy in Africa, according to the International Finance Corporation (IFC).

Zambia has set a new benchmark for low cost solar energy in Africa, according to the International Finance Corporation (IFC).

A recent auction organised by Scaling Solar, a World Bank Group Programme, resulted in contracts being awarded to developers for solar power plants with bids as low as 6.02 cents/kWh.

The tariffs are the lowest for solar power seen to date in Africa and among the lowest in the world, according to the IFC.

Winning bids in the auction included a joint bid from Neoen SAS and First Solar Inc., who offered 6.02 cents/kWh, and one from Enel SA at 7.84 cents/kWh.

The auction attracted bids from 48 solar energy developers and will help to boost generating capacity in Zambia, where only one-fifth of the population has access to electricity and two years of drought have crippled existing hydropower facilities.

"These are the lowest solar power tariffs seen to date in Africa, and among the lowest prices for solar power anywhere in the world — a game changer for Zambia and other countries in the region facing electricity shortages," said Philippe Le Houérou, IFC’s Chief Executive Officer and Executive Vice President. "Scaling Solar is paving the way for governments to deliver fast, cheap, and clean energy – even in relatively small and untested markets – and setting a new regional standard for procuring large-scale solar power."

Scaling Solar includes a full suite of World Bank Group products and services to help governments run a competitive auction for solar power, and to reduce risks for solar power developers in a new market. This includes IFC’s advice and debt financing, the World Bank’s insurance products, and the Multilateral Investment Guarantee Agency’s guarantees.

The new Zambian solar plants will be built over the next year and feed into the grid, providing a new clean power source for the country, where years of drought have significantly reduced hydropower generation and triggered a national energy crisis. According to their winning bids, Neoen and First Solar will build a 45 MW plant and Enel will build a 28 MW plant, boosting the country’s available generating capacity by 5 per cent and helping restore water levels in Zambia’s dams.

Senegal and Madagascar have also signed up to run Scaling Solar tenders, which are expected to move to prequalification in the coming months. The program aims to develop 1 GW of solar power in the next three years. At the tariffs recorded in Zambia, this would provide African consumers with more than $7 billion in savings compared to oil-based power over the life of the projects.