National Energy Policy 2019

2.1 Institutional Arrangements ...................................................................................................... 2

2.2 Legal Framework ..................................................................................................................... 6

2.3 Energy Sources ........................................................................................................................ 7

2.4 Energy Scenario in Zambia ................................................................................................... 11

2.4.1 Electricity ....................................................................................................................... 11

2.4.2 Petroleum ....................................................................................................................... 12

2.5 Energy Efficiency (EE) and Conservation............................................................................. 14

2.6 Energy Financing ................................................................................................................... 14

2.7 Energy Pricing ....................................................................................................................... 14

2.8 Research and Development ................................................................................................... 15

2.9 Mainstreaming Issues ............................................................................................................ 15 CHAPTER THREE .............................................................................................................................. 17 VISION, RATIONALE AND GUIDING PRINCIPLES ..................................................................... 17

3.1 Vision..................................................................................................................................... 17

3.2 Rationale ................................................................................................................................ 17

3.3 Guiding Principles ................................................................................................................. 18 CHAPTER FOUR ................................................................................................................................. 19 POLICY OBJECTIVES AND MEASURES ........................................................................................ 19

4.1 Overall Objective ................................................................................................................... 19

4.2 Policy Objectives and Measures ............................................................................................ 19

4.2.1 Institutional Arrangement .............................................................................................. 19

4.2.2 Regulatory Frameworks ................................................................................................. 19

4.2.3 Efficient Use of Energy Resources ................................................................................ 20

4.2.4 Sustainable Exploitation of Biomass ............................................................................. 20

4.2.5 Exploitation of Renewable Energy ................................................................................ 20 i

4.2.6 Access to Electricity....................................................................................................... 20

4.2.7 Petroleum Products ........................................................................................................ 21

4.2.8 Private Sector Participation ............................................................................................ 21

4.2.9 Innovation, Research and Development......................................................................... 21

4.2.10 Gender, Climate Change, Health and Safety.................................................................. 22 CHAPTER FIVE .................................................................................................................................. 23 IMPLEMENTATION FRAMEWORK ................................................................................................ 23

5.1 Institutional Arrangements .................................................................................................... 23

5.2 Legal Framework ................................................................................................................... 24

5.3 Resource Mobilisation and Financing ................................................................................... 25

5.4 Monitoring and Evaluation .................................................................................................... 25 ii FOREWORD Energy is a critical input in the socio-economic development of the country. Every productive sector in the economy relies on the provision of energy. It is therefore imperative that the energy sector is efficiently managed through a policy framework that meets the ever-rising challenges not only in this sector but in the economy as a whole. The National Energy Policy 2019 (NEP 2019) builds on previous policies of 1994 and 2008 and is anchored on the Seventh National Development Plan (7NDP) and Vision 2030. While the essence of the previous policy objectives remain valid, the social, political, environmental and economic situation has undergone significant changes. This has prompted the review of the 2008 Energy Policy and the formulation of the NEP 2019 which incorporates current developments not only in the energy sector and the entire economy but also the regional and international environment. Zambia is aspiring to become a middle-income economy by 2030. This entails formulating and implementing robust enabling policy measures that meet the energy demand of the future. The NEP 2019 therefore, is aimed at guiding the energy sector in the development of the electricity generation, transmission and distribution capacity. Further, it will enhance cost - effectiveness and efficiency in the supply of petroleum products. It will also facilitate the development and deployment of renewable and alternative energy. Furthermore, the Policy will promote security of energy supply through diversification of energy sources at cost reflective pricing which will promote new investment in the sector, consequently scaling up access to energy services in rural and urban areas. The NEP 2019 also considers climate change mitigation and adaptation while advancing sustainable development of the sector. In addition, the Policy mainstreams gender and disability aspects aimed at increasing access to clean and efficient energy thereby reducing poverty among vulnerable groups especially women and children. I am, therefore, confident that the National Energy Policy 2019 will be instrumental in developing and accelerating economic activities. Matthew Nkhuwa, MP. MINISTER OF ENERGY iii ACKNOWLEDGEMENTS The provision of energy services is an essential ingredient of socio-economic development worldwide. Energy is required in meeting the basic human needs such as food, shelter, health, transport and education. The development of the NEP 2019 is the result of an intensive and extensive consultative process, involving a variety of stakeholders in the country. While it is not possible to mention everyone who contributed to the development of the Policy, we would like to acknowledge the contributions from the following institutions: 1. Cabinet Office; 2. Government Ministries/Institutions; 3. Cooperating Partners; 4. Non-Governmental Organisations; 5. Professional Bodies; 6. Energy Consumers; 7. Energy and Power Utilities; 8. Private Sector; and 9. Civil Society. The development and publication of the National Energy Policy 2019 would not have been possible without the generous financial and technical assistance of the European Union (EU). The Ministry of Energy is therefore, greatly indebted to EU for their vital assistance. Trevor K. Kaunda Permanent Secretary MINISTRY OF ENERGY iv WORKING DEFINITIONS Biofuel: A wide range of liquid and gaseous fuels derived from biomass including liquid fuel ethanol and biodiesel, as well as biogas which can be combusted in vehicle engines as transport fuels and in stationary engines for motive power, heat and electricity generation. Biogas: A gaseous mixture consisting mainly of methane and carbon dioxide produced by the anaerobic decomposition of organic matter. Biomass: An organic matter such as wood fuel (firewood and charcoal), agricultural wastes, forestry wastes, industrial/municipal organic waste, energy crops and products and animal waste that is available for conversion into energy. Coal: A combustible black or dark brown rock consisting chiefly of carbonized plant matter, found mainly in underground seams and used as fuel. Cost reflective Tariffs set to recover all the allowable costs of each regulated and tariffs: licensed activity. “Allowable costs” in this case means all operating costs reasonably incurred, all capital costs prudently invested, and a fair rate of return on used and useful utility assets. Distribution: Transportation of electricity on a distribution system for delivery to a consumer. Electricity: Electrical energy produced by physical sources of energy such as hydro- power, wind power, solar power, petroleum, coal, biomass, nuclear energy or any other source. Energy The sustainable management and use of energy resources for their Conservation: inherent value and for the benefit of society, bearing in mind that future generation have as much a right to these resources as our own. v Energy Measures (practices, efficient devices & appliances, regulatory e.g. Efficiency: labelling and codes) undertaken to reduce the losses in generation, transmission and distribution networks on the supply side and to reduce the consumption of energy in demand sectors that include household, industry and commerce. Energy: Any source of electrical, mechanical, thermal, nuclear or chemical power for any use. Gel Fuel: An energy source obtained from ethanol. Generation: The process of converting energy into electricity and or useful heat from a primary energy source such as wind, solar radiation, natural gas and biomass. Geothermal Energy available as heat emitted from within the earth’s crust, usually in Energy: form of hot water steam. Grid: A system of high-tension cables by which electrical power is distributed through a region. Hydropower: Electricity generated from the potential energy of water captured when moving from higher to lower elevations. Installed The maximum aggregate capacity of the plant that generate, transmit or capacity: distribute electricity. Large Any hydropower station with a minimum output above 20MW. Hydropower vi Open Access The possibility for any party selling or buying electricity to use Regime: transmission and distribution systems without discrimination, subject to transparently formulated security system constraints. Petroleum: A liquid mixture of hydrocarbons (crude oil) which is present in suitable rock strata and can be extracted and refined to produce fuels including petrol, paraffin and diesel. Power: The rate at which energy is converted per unit of time, expressed in watts. Renewable Non-fossil sources of energy capable of use for the generation of Energy: electricity including wind, solar, hydro, bio-mass and geothermal. Small Any hydropower station with the maximum output up to 20MW. Hydropower Solar Energy: Energy irradiated from the sun to the earth for thermal applications and electricity generation. Transaction Legal documents relevant to facilitate investment in the energy sector Documents which may include: Implementation Agreements, Power Purchase Agreements, Connection Agreements and Supply Contracts. Transmission: Transportation of electricity from the source of electricity production on a transmission system for delivery to distribution network service providers and final consumers. Uranium: Chemical element of atomic number 92, a dense grey radioactive metal used as a fuel in nuclear reactors. Wind Energy: Kinetic Energy of wind exploited for electricity generation in wind turbines. vii ACRONYMS EE Energy Efficiency ERB Energy Regulation Board ESCO Energy Service Companies GJ Gigajoules (109 Joules) unit of energy GW Gigawatt (109 Watts) unit of electric power kWh kilowatt hour M² Square Meter MOE Ministry of Energy MT Metric Tonne MTOE Million Tonnes Oil Equivalent MW Megawatt (106 Watts) unit of electric power NDC Nationally Determined Contributions NDP National Development Plan NEP National Energy Policy OPPPI Office for Promoting Private Power Investment PPP Public Private Partnership RE Renewable Energy REEESAP Renewable Energy and Energy Efficiency Strategy and Action Plan SADC Southern African Development Community TAZAMA Tanzania Zambia Mafuta ZABS Zambia Bureau of Standards viii CHAPTER ONE INTRODUCTION Energy is the largest commodity market in the world and it is increasingly important that it is sustainably managed. A robust National Energy Policy is key in facilitating increased access to energy services. Zambia aspires to be a prosperous middle-income country by 2030. This will require the supply of energy services to Zambians as an input to their productive activities. The NEP 2008 while well-conceived, is no longer adequate for the changing circumstances in the energy sector in Zambia. Therefore, responding to different development needs will require a sound energy policy that will build on the lessons learnt during the implementation and utilization of the NEP 2008. The opportunities in the management of the supply and utilisation of energy in Zambia at present and into the future are abundant. The NEP 2019 will guide Ministries and Institutions in the Zambian economy to meet the challenges of achieving access to reliable, sustainable and affordable energy services. The Policy provides guidance for the continued development of the energy sector essentially on the security, affordability, supply and utilisation of energy. The NEP 2019 is in line with the political, economic, social, technological and environmental changes that have occurred in the past decade. The NEP 2019 is divided into six chapters. Chapter One covers the introduction, while Chapter Two provides a critical Situation Analysis. The Third Chapter outlines the vision, rationale for the Policy and underlying guiding principles. Chapter Four provides strategic objectives and an outline of the measures for achieving the set objectives. Lastly, Chapter Five provides the implementation framework based on institutional and legal frameworks, resource mobilisation and financing and the Monitoring and Evaluation of the implementation of the policy and assessment of its impacts. 1 CHAPTER TWO SITUATION ANALYSIS

2.1 Institutional Arrangements According to Gazette Notice No. 6526 of 2016, the Ministry of Energy is responsible for the development and management of the energy sector. However, several Government Ministries play a major role in the sector as follows: (a) The Ministry of Finance is responsible for mobilisation and allocation of financial resources for energy projects; (b) Ministries of Water Development, Sanitation and Environmental Protection, Lands and Natural Resources are responsible for allocation of water permits for hydro power and environmental impact assessments, provision of land rights for energy projects, wood fuel regulations and ensure that climate change is mainstreamed in energy programmes; (c) Ministry of Local Government is responsible for the management of waste; (d) Ministry of Mines and Mineral Development is responsible for exploration and extraction of hydrocarbons and geothermal; (e) Ministry of Agriculture is responsible for crop production which is used for biofuels; (f) Ministry of Transport and Communication is responsible for providing Metrological data which is used in the development of energy projects especially wind and solar projects. In addition, the Ministry also regulates transportation of petroleum products and energy equipment; (g) Ministry of Higher Education is responsible for scientific research; (h) Ministry of Commerce, Trade and Industry is responsible for facilitating investment and incentives through the Zambia Development Agency and standards setting; and (i) Ministry of Housing and Infrastructure Development is responsible for building codes and the construction of energy infrastructure such as fuel depots and oil pipelines. Considering the multiplicity of players in the sector, coordination of programmes is achieved through the 7NDP clusters on Economic Diversification and Job Creation and Reducing Development Inequalities. Further, in the recent past, Government has created ad-hoc Inter- Ministerial Committees to deal with specific challenges and emerging issues that have arisen in the sector. In view of the numerous actors in the sector, coordination has remained a challenge and has affected service delivery and efficiency levels. 2 The Energy sector comprises both public and private actors. The Ministry of Energy supervises the following statutory bodies: Energy Regulation Board (ERB); Zambezi River Authority (ZRA); and Rural Electrification Authority (REA). The Ministry also provides guidance to the following State-owned enterprises: Indeni Petroleum Refinery Company Limited; Tanzania Zambia Mafuta pipelines Limited (TAZAMA); and ZESCO Limited. However, Indeni Petroleum Refinery Company Limited and ZESCO Limited now fall under the Industrial Development Corporation (IDC), a share-holding arm of the Government. This set-up poses overlapping mandates between the Ministry of Energy and IDC in supervision of INDENI and ZESCO. Apart from this supervisory role, the Ministry coordinates all other actors in the sector. Further, in order to promote private sector participation, the Office for Promoting Private Power Investment (OPPPI) has been established under the Ministry. The following section presents the narrative of the statutory bodies and State-owned enterprises related to the energy sector.

2.1.1 Energy Regulation Board The Government established the Energy Regulation Board through the Energy Regulation Act CAP 436 of the Laws of Zambia as amended in 2003. The Board’s mandate is to regulate the energy sector through: issuance of licenses to undertakings; monitoring the efficiency and performance of undertakings; receiving and investigating complaints; approval of location and construction of energy infrastructure; price adjustments of energy services and products; and development of standards codes, guidelines and other regulatory interventions. As stated above, the ERB has the mandate of ensuring effective regulation of the sector. However, its legal framework does not adequately enable the effective regulation of the sector. It is also unable to balance the interests of consumers and licensees, thus, failing to adequately offer protection of consumers. In addition, the legal framework has no provision for the Board to create a holistic Energy Fund to enable it respond to current challenges in the sector. The ERB licensing functions significantly depend on other prior regulatory approvals from other statutory bodies and agencies such as Water Resource Management Authority (WARMA), National Heritage Conservation Commission (NHCC), Zambia Environmental Management Agency (ZEMA), Zambia Development Agency (ZDA) and Department of Lands. However, there is limited collaboration among institutions in the sector. This has 3 contributed to lengthy licensing processes and increased cost of doing business for the private sector.

2.1.2 Zambezi River Authority The Zambezi River Authority is jointly owned by Zambia and Zimbabwe on a 50-50 basis and was established through the Zambezi River Authority Act No. 17 of 1987 which was simultaneously enacted in both countries. The main function of ZRA is to manage the water in the Kariba Dam. The Authority is responsible for the operation and maintenance of Kariba Dam Complex, investigation and development of new dam sites on the Zambezi River and analyzing and disseminating hydrological and environmental information pertaining to the Zambezi River and Lake Kariba.

2.1.3 Rural Electrification Authority In order to accelerate electricity access in rural areas, Government established the Rural Electrification Authority (REA) through the enactment of the Rural Electrification Act No. 20 of 2003. The mandate of REA is to provide electricity infrastructure to rural areas of Zambia using appropriate technologies. The access rate for grid connected households stands at 4.4 percent while an additional 7.4 percent are connected to solar home systems. There is limited participation of the private sector in the provision of electricity in rural areas, were 60 percent of the populace reside. In addition, there is no mechanism to coordinate players in rural electrification especially in the off-grid space. Further, the Authority is faced with the challenge of inadequate funding to fulfil its mandate.

2.1.4 ZESCO Limited ZESCO Limited is a vertically integrated power utility and is responsible for generation, transmission, distribution and supply of electricity in the country. The company is the dominant participant in the electricity market in Zambia. Its generation capacity stands at 2,348 Mega Watts (MW) with customer base of 1,000,000 as at the end of the third quarter of 2019. In 2000, Government embarked on a commercialization program for ZESCO with the aim of making the company financially viable. However, the commercialization of ZESCO has not been fully attained largely due to non-cost reflective tariffs. 4 In addition, the Single Buyer Model has contributed to ZESCO’s challenges as it compels the company to purchase all power produced by Independent Power Producers (IPPs). In order to address the challenges that the company is encountering, the Government has embarked on electricity sector reforms.

2.1.5 INDENI Petroleum Refinery Ltd The INDENI Petroleum Refinery is wholly owned by the Zambian Government through the Industrial Development Corporation (IDC) and has a design capacity to refine 1.1 million Metric Tonnes (MT) per annum. However, the current average operating capacity is 720, 000 MT. This is insufficient to meet national petroleum demand as it accounts for 40 percent of the country’s petroleum requirements with the rest being imported as finished petroleum products. Further, the refinery is unable to refine pure crude oil and instead processes commingled feedstock consisting of a crude base, diesel and naphtha. In addition, due to its current configuration, the refinery is unable to produce cleaner fuels such as low sulphur content diesel.

2.1.6 TAZAMA Pipelines Limited TAZAMA is jointly owned by Zambia and Tanzania through a shareholding structure of 67 percent for Zambia and 33 percent for Tanzania. The Company is responsible for transporting commingled crude oil through the 1,710-Km pipeline from Dar-es-Salaam in Tanzania to Ndola in Zambia. The company is also responsible for storage and marketing of finished petroleum products. However, TAZAMA faces challenges of limited output to meet the national demand of petroleum products as well as inadequate funding to rehabilitate and upgrade the ageing infrastructure.

2.1.7 Office for Promoting Private Power Investment The Office for Promoting Private Power Investment (OPPPI) was established in 1998 by Government in order to promote private sector participation in the development of power in the country. Its mandate is to coordinate the development and implementation of projects by the private sector. The OPPPI coordinated the implementation of projects such as the 300 MW Maamba Coal Fired Power Plant, 120 MW Itezhi-Tezhi Hydroelectric Power plant, 750 MW Kafue Gorge Lower Hydroelectric Power Project and the Zambia-Tanzania-Kenya Power 5 Interconnector Project. Currently the OPPPI is coordinating feasibility studies for a combined capacity in excess of 2000 MW, with some of the projects currently at the stage of Power Purchase Agreement negotiations. Despite the various measures and interventions by Government, most of the projects being undertaken have stalled and failed to reach financial close mainly due to the low tariffs that have been found inadequate and unsustainable to guarantee return on investment by the respective developers. Other factors that have contributed to low investment in power developments are bureaucratic processes that govern the issuance of licenses, permits and approvals administered by various Government agencies.

2.2 Legal Framework The energy sector is currently governed by four (4) major statutes namely: The Energy Regulation Act; the Electricity Act; the Petroleum Act; and the Rural Electrification Act. The Energy Regulation Act established the Energy Regulation Board, as a body corporate, whose primary role is to license entities that intend to produce energy. The Electricity Act provides for the regulation of generation, transmission, distribution and supply of electricity. The Petroleum Act provides for the importation, conveyancing and storage of petroleum and other inflammable oils. The Rural Electrification Act established the Rural Electrification Authority whose primary role is to provide electricity to rural areas of Zambia. Notwithstanding the foregoing, the legal framework has inherent deficiencies such as the following: (a) There is no provision for the Multi-Year tariff regime which is meant to provide a cost reflective and yet predictable and consistent tariff framework; (b) The regulator lacks powers to set, determine, approve and review non-retail tariffs; (c) It has no powers to regulate Power Purchase Agreements and Power Supply Agreements including applicable tariffs by the regulator; (d) The regulator has no powers to establish and maintain a sector Fund in which resources are contributed by energy market actors; (e) The legal framework for the regulator is solely focused on licensing at the expense of effective enforcement of regulations; 6 (f) There is no legal framework for importation and sale of power in emergency situations and the incidental determination of what amounts to emergency situations; (g) There is no provision to empower REA to coordinate and approve all rural electrification programmes by the private sector, civil society and other development partners; (h) There are no provisions enable the REA to engage in income generating activities; and (i) There is no provision to enable the Ministry through the OPPPI coordinate the undertaking of feasibility studies by the private sector.

2.3 Energy Sources The primary sources of energy in Zambia are hydro, biomass, coal, wind, geo-thermal, solar, uranium, waste (including municipal solid and agricultural waste) and petroleum. Zambia is confronted with an increasing energy demand, resulting from demographic and socio- economic factors, at an average of 6 percent or 150-200 MW per annum.

2.3.1 Large Hydropower Zambia has a hydropower potential in excess of 6,000MW out of which about 2,354MW has been developed. Hydropower dominates the electricity supply industry with up-to 80.8 percent. The large hydropower projects under feasibility studies are in excess of 2,800MW situated on the major rivers of Zambia. The major effect of hydropower generation is climate change.

2.3.2 Renewable Sources of Energy The sources of renewable energy include solar, wind, geothermal, small hydro and biomass. (a) Solar Zambia has an average solar irradiation of 5.5kWh/m²/day with approximately 3,000 sunshine hours annually providing good potential for photovoltaic and solar thermal applications (including electricity generation, solar home systems, solar water pumping and solar water heating). Solar power generation accounts for 3 percent of the total installed generation capacity. The level of investment in solar energy electricity generation has been low due to, inter alia, the 7 high cost of capital and inadequate regulatory frameworks for renewable energy systems that have caused uncertainties for investments. (b) Wind The wind resource regime in Zambia has an average wind speed of 6 meters per second measured at eighty metres (80m) above the ground. The available wind resource is sufficient for electricity production, water pumping for household use and irrigation. However, there is no power generation from wind energy at the moment because its development has been largely impeded by inadequate mechanisms to create an enabling environment and leverage private investment. Resource mapping has been undertaken to identify suitable sites and some developers are currently undertaking feasibility studies on selected sites. (c) Geothermal There are more than eighty (80) hot springs spread out in different parts of the country which indicate potential for geothermal for both power generation and direct applications such as agriculture (greenhouses), dairy industry, aquaculture and in the promotion of tourism products. However, there has been inadequate exploitation of this resource for electricity due to the high costs of exploration. Currently, one developer is exploring the development of geothermal in Lochinvar in Southern Province. (d) Small hydropower The contribution of small hydropower to the total installed electricity generation capacity is 1.5 percent. Government has recognized the important role small hydropower plays in rural electrification and the off-grid space where large hydropower and grid extension may not be economically and financially viable. The major factors that have impeded the development of small hydropower are economies of scale and long distances to load centres. However, many developers are undertaking feasibility studies for a number of sites located in many parts of the country. (e) Biomass Biomass is the predominant source of energy in Zambia accounting for more than 70 percent of total primary energy supply. The main forms and products of biomass include wood fuel (charcoal and firewood), biogas, pellets, briquettes, biofuels and gel fuel mainly used as a household fuel for cooking and heating. 8 Wood fuel is the most widely used fuel for cooking. Its utilisation is considered unsustainable because the harvest exceeds re-growth of biomass contributing to climate change and negative health effects. The high dependence on wood fuel is due to low access and also unreliable electricity supply, high cost of efficient alternatives, inadequate enforcement of legislation and coordination among key sector institutions. (f) Waste to Energy Zambia has potential to utilize waste to produce energy, electricity and other by-products. The forms of waste to be targeted may include but not limited to municipal solid waste, sewerage wastewater, agricultural crop residues, livestock manure or waste, wood chips or biomass and industrial waste. This potential has been identified and several private developers have expressed interest to undertake feasibility studies for Waste-To-Energy project in Zambia. The institutions responsible for the management of waste is the Ministry of Local Government through the local authorities.

2.3.3 Coal The proven reserves of coal in Zambia are estimated to be over 30 million tonnes, mainly consumed by electricity, mining and commercial industries. The generation capacity from coal accounts for 10 percent of the total installed capacity. More exploration work is required to ascertain the quality and extent of the coal deposits for electricity generation. Production of electricity from coal is considered unclean and this poses a challenge in the mobilisation of financing for the projects. This resource has the potential to provide sustainable power and improve security of electricity supply.

2.3.4 Uranium Zambia has large deposits of uranium which can be utilized for energy production. However, the utilization of uranium in Zambia has been limited to research, education, industrial and medical applications. There is no electricity generation from Uranium resource. Other than the high initial investment cost for development of nuclear power plants, investment in this sector has also been deterred by inadequate policy, legal and institutional frameworks governing the electricity sub-sector to implement the nuclear power programme. 9

2.3.5 Petroleum Petroleum products contribute 9.4% to the total national energy demand. Zambia imports all its petroleum products i.e. petroleum feedstock and finished products. The imported feedstock is in the form of comingled crude oil which is pumped through the TAZAMA pipeline and refined at INDENI Petroleum Refinery in Ndola. The refined petroleum products are imported to supplement the INDENI production by road, and rail through private suppliers. The petroleum products are then distributed to various Government owned depots where Oil Marketing Companies uplift the finished products, distribute them to their own depots, service stations and commercial customers. Established infrastructure for petroleum import and processing include the 1,710-kilometre TAZAMA pipeline, jointly owned by Zambia (as major shareholder) and Tanzania which runs from Dar es Salaam in Tanzania to Ndola and INDENI Petroleum Refinery with a design capacity of 1.1 million tonnes per annum. Other facilities are Bulk Fuel Depots as shown in Table 1 below: No. Description Capacity (Million Litres) 1. Ndola Fuel Terminal 110 2. Lusaka Fuel Depot 25 3. Solwezi Fuel Depot 15.5 4. Mpika Fuel Depot 6.5 5. Mongu Fuel Depot 6.5 6. Mansa Fuel Depot 6.5 Total 170 Table 1: Provincial Bulk Fuel Depot capacities In order to augment the petroleum supply, Government is promoting the use of Biofuels in the transport sector. Biofuel production is considerably lower with one commercial producer registered to date. Mandatory blending ratios versus demonstrated capacity to produce, delays in agreeing producer prices, industry incentives across the value chain as well as lack of blending facilities are factors delaying increased investment in biofuels. The Petroleum sub-sector is faced with the challenges relating to fluctuations in the international oil prices; fluctuations in the exchange rate of the Zambian kwacha against major 10 trading currencies; overdependence on imported petroleum products and inadequate petroleum storage and transportation infrastructure.

2.4 Energy Scenario in Zambia Zambia’s total population is expected to grow from 17.9 million in 2019 to 26.9 million by 2035 leading to an increase in the demand for energy services. The energy sector therefore needs to put in place measures and interventions to meet the future demand.

2.4.1 Electricity The installed generation capacity in Zambia is 2,976.3 MW. The installed capacity comprises of 80.8 percent of hydro, 10 percent of coal, 3.5 percent of heavy fuel oil, 2.7 percent of diesel and 3 percent solar PV as of September 2019 as shown in Figure 1 below. Solar 3% Figure 1: Electricity Generation The Mining Sector is the largest consumer of electricity with an estimated 51.1 percent while the consumption for the domestic sector stands at 33.2 percent. Figure 2 shows the consumption of electricity by sector. 11 Construction 0.08% 0.1% PPAs 1.15% 0.0% Transport 0.25% 0.3% Quarrying 1.79% 1.0% Energy & Water 0.52% 0.7% Trade 0.87% 0.9% Others 0.64% 0.7% Agriculture 2.27% 2.1% Manufacturing 3.38% 4.1% Finance & Property 5.46% 5.2% Domestic 33.16% 34.0% Mining 51.08% 50.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 2018 2017 Figure 2: Electricity Consumption by Economic Sub-Sector, ERB Statistical Bulletin 2018. At household level, an estimated 67.3 percent of households in urban areas and about 4.4 percent of households in rural areas have access to electricity, translating into 31.4 percent at national level. Measuring access has been a challenge due to the absence of an agreed framework for measuring energy access. In addition, the government recognises that the current electrification approach faces several challenges and needs to be reviewed to make it more sustainable if the country is to achieve the desired electrification goals. A planned, systematic approach is necessary for effective implementation of access for all. With regards to biomass, 84.5 percent of rural households use firewood for cooking, followed by charcoal at 13.2 percent of households. In urban areas, most households use charcoal for cooking at 59.1 percent, and firewood at 6 percent.

2.4.2 Petroleum The national consumption of petroleum consists of heavy fuel oils, liquified petroleum gas, jet- A1, kerosene, unleaded petrol and diesel. In 2018, the consumption of diesel increased by 3.7 percent from 794,485 MT (945,816 m3) in 2017 to 823,822 MT (980,740 m3). Diesel being a major input in the production of copper, this growth was in line with the recorded increase in mining output. According to the Zambian Chamber of Mines, copper production increased by 7.8 percent from 799,329 MT in 2017 to 861,946 MT in 2018. 12 The second most consumed product in the hierarchy was petrol at 327,029 MT (436,039 m3) from 325,940 MT (434,587 m3) in 2017. The consumption in 2018 reflected a marginal increase of 0.33 percentage points compared to 2017. The consumption of LPG increased from 4,719 MT in 2017 to 7,006 MT in 2018 representing 48.5 percent. The increase in LPG was triggered by the increase in local demand due to most consumers using it as an alternative source of energy. Similarly, the consumption of Jet A-1 increased by 4.0 percent from 26,070 MT (32,792 m3) in 2017 to 27,106 MT (34,095 m3) in 2018. Meanwhile, the consumption of HFO decreased by 10.6 percent from 161,766 MT in 2017 to 144,610 MT in 2018. The reduction was mainly as a result of the supply constraint of HFO from INDENI. Similarly, there was a 5.6 percent reduction in the consumption of kerosene from 16,242 MT (20,430 m3) in 2017 to 15,355 MT (19,289 m3) in 2018. Heavy Fuel LP Jet-A1 Kerosene Unleaded Diesel Total Oils Petrol 2011 49,461 2,424 32,593 19,898 182,123 577,836 864,335 2012 60,222 658 49,477 14,669 234,224 675,756 1,035,006 2013 50,793 3,021 49,613 12,315 275,604 676,078 1,067,424 2014 116,821 3,680 38,049 13,776 304,562 700,577 1,177,465 2015 129,149 3,230 44,160 18,300 366,524 818,418 1,379,781 2016 97,881 2,742 27,237 16,045 347,266 791,277 1,282,448 2017 161,766 4,719 26,070 16,242 325,940 794,485 1,329,222 2018 144,610 7,006 27,106 15,335 327,029 823,822 1,344,908 Figure 3: Trend in national consumption by fuel type, 2011-2018 13

2.5 Energy Efficiency (EE) and Conservation Zambia is implementing energy efficiency initiatives which include promotion of efficient utilisation of energy services and switching to other alternative types of energy sources and technologies. Specific efforts have been on the development of energy performance standards developed for lighting, lamps, electric motors, and solar water heaters. However, these efforts need to be well coordinated and extended to other energy services. The absence of dedicated instruments such as building codes, and Minimum Energy Performance Standards has affected adoption of EE and conservation.

2.6 Energy Financing The sector has four (4) funding mechanisms namely: Rural Electrification Fund (REF); Strategic Reserves Fund (SRF); Uniform Petroleum Pricing (UPP); and Electricity Fund (EF). The REF was established in 1994, by committing the sales tax on electricity where a levy of 3.45 percent on electricity consumption was introduced. The fund was created to supplement the national budget on capital expenditure for rural electrification. The SRF was introduced to stabilize the price of fuel, manage, rehabilitate and construct petroleum storage facilities as well as emergencies in the petroleum sub-sector. The UPP mechanism was introduced in 2010, in order to equalise the prices of petroleum products throughout the country. It is a self- financing mechanism where Oil Marketing Companies (OMCs) contribute and claim from the Fund depending on their distance from the Bulk Fuel Depots. The EF was created to finance power purchases, infrastructure development and emergencies in the electricity sector. Given the foregoing, it could be noted that the utilisation of financial resources from each fund is restricted to the objective for setting it up, and as such does not provide for financing of other activities even in emergency situations.

2.7 Energy Pricing Historically, Zambia has had one of the lowest electricity tariffs in the region and efforts to migrate towards cost reflective tariffs have achieved less success. Bulk trade of electricity is determined by bilateral contracts negotiated between the parties involved and is subject to approval by the ERB. There has been low participation of private players in the energy sector due to low tariffs that are not cost reflective. This situation inhibits developers from signing Power Purchase Agreements with ZESCO Limited, who is the preferred off-taker. In order to meet the growing electricity demand, ZESCO has in the recent past procured power from 14 independent power producers at a higher tariff than the average selling tariff. This tariff gap has generated unsustainable annual losses for ZESCO. With respect to petroleum products, the pricing uses the Cost-Plus Model (CPM) which takes into account all the costs that go into the entire petroleum supply chain. The pricing formula includes the refinery, Gate Cost, government taxes, ERB fees, fuel levy, transport and Oil Marketing Company (OMC) dealer margins.

2.8 Research and Development The existing policy framework and environment enables the energy sector research initiatives to be conducted by various institutions and individuals. Energy sector research in Zambia is mostly influenced by international and local trends. There are several institutions undertaking energy sector research and development. However, the institutions face several challenges which include among others inadequate funding, inadequate coordination mechanisms and limited capacity for technical or specialised research.

2.9 Mainstreaming Issues The impacts of climate change are adversely affecting Zambia where rainfall patterns are no longer predicable and the power generation from hydropower has been compromised. As a result, the Government is undertaking various initiatives aimed at mitigating the impact of climate change which include but not limited to: diversification of electricity sources; efficient management of forests; and promotion of climate smart agricultural practices. In respect to gender, the majority of citizens depend on wood and charcoal for basic energy needs such as cooking and heating. Most households rely on locally sourced biomass for their daily energy needs. Hence, they are increasingly vulnerable to biomass and energy scarcities. In addition, energy is very sensitive to gender in that most women, especially in rural communities, devote most of their productive time collecting firewood to prepare a meal for their family. Health and wellness matters are correlated to the developments in the energy sector. If inadequate measures are put in place, negative impacts including the following may manifest: (a) electrocutions arising from vandalism of electricity infrastructure and lack of adequate personal protection equipment; 15 (b) respiratory illnesses as a result of exposure to smoke from traditional cook stoves and open fires and illegal fuel vending; (c) fire hazards from illegal storage of fuel; and (d) Back aches in women in collection of wood fuel. It is envisaged that the NEP 2019 will provide comprehensive guidance to all stakeholders in the effective development and management of the energy sector for the benefit of the citizens. 16 CHAPTER THREE VISION, RATIONALE AND GUIDING PRINCIPLES

3.1 Vision “Universal access to clean, reliable and affordable energy at the lowest total economic, financial, social and environmental cost consistent with national development goals by 2030”.

3.2 Rationale Government has been implementing the NEP 2008 which expired in 2018. The Policy played an important role in providing guidance in the energy sector. The Policy endeavoured to attain overall macro–economic policy objectives of sustainable energy development and the creation of a market environment promoting increased private sector participation. Over the years, dynamics and emerging issues in the energy sector, effects of climate change and advances in technology have necessitated the development of the NEP 2019. The Policy therefore, (a) responds to emerging market dynamics in the energy sector; (b) promotes the provision of reliable, accessible and affordable energy as a building block to reduce poverty and facilitate expansion of businesses; (c) promotes the implementation of cost reflective tariff mechanisms in the pricing of energy services in order to promote investment; (d) re-aligns the various institutional mandates to enable the institutions respond to the changes that have occurred in the energy sector; (e) streamlines the various regulatory instruments in the energy sector to enhance service delivery and access to quality energy; (f) encourages the multiplicity of players in the energy market through appropriate institutional and legal frameworks; 17 (g) reaffirms the mainstreaming of gender as a critical tool for promoting efficient allocation of resources and promoting equity; (h) reaffirms the commitment for the establishment of adequate measures aimed at promoting sustainable energy development in an environmentally friendly manner. (i) promotes alternative energy sources and technologies for increased provision of clean and efficient energy services; and (j) enhances consumer rights in order to protect the consumer from exploitation.

3.3 Guiding Principles The NEP 2019 will be guided by the following national values and principles: Morality and Ethics: In implementing the Policy, the Government will ensure that the energy resource is exploited and utilised in an ethical manner. It will also ensure that the players in the market uphold morality and ethics in conducting their business. Patriotism and National Patriotism and national unity are a cornerstone for social- Unity: economic development. Infrastructure in the energy sector is very key to ensure efficient delivery of services. The sector over the years has seen vandalism of key energy sector infrastructure. The Public will have to exercise patriotism and national unity so as to ensure ownership of infrastructure. Social Justice: In implementing the Policy, the Government will ensure that it protects the vulnerable groups in society. Equality and non- The Government will endeavour not to discriminate in discrimination: the provision of energy services. Accountability: All stakeholders in the energy sector should be able to explain and account for their actions as well as be open to subject themselves to scrutiny. Government will ensure that all actors will provide information on services offered in the sector. 18 CHAPTER FOUR POLICY OBJECTIVES AND MEASURES

4.1 Overall Objective The overall objective of the NEP 2019 is to achieve an optimal energy resources utilization to meet Zambia's domestic and non-domestic needs at the lowest total economic, financial, social, environmental and opportunity cost and establish Zambia as a net exporter of energy.

4.2 Policy Objectives and Measures The NEP 2019 pursues the following specific objectives and related policy measures:

4.2.1 Institutional Arrangement Objective 1. To strengthen institutional capacity in the energy sector in order for them to be more responsive to the energy needs of the country. Policy Measures

1.1 Enhance human resource capacity in the energy sector;

1.2 Establish coordination mechanisms for institutions in the energy sector.

1.3 Facilitate and promote capacity building for private sector institutions;

1.4 Decentralize energy institutions; and

1.5 Facilitate the establishment and management of the energy fund.

4.2.2 Regulatory Frameworks Objective 2. To strengthen regulatory frameworks in order to be more responsive to the energy needs of the country. Policy Measures

2.1 Strengthening the mandate of the Energy Regulator;

2.2 Establish the regulatory frameworks for off-grid systems;

2.3 Strengthen and harmonise standards with regional and international regulations and conventions where appropriate; and

2.4 Facilitate the adoption of the Open Access Regime in the country. 19

4.2.3 Efficient Use of Energy Resources Objective 3. To promote efficient use of energy resources in order to conserve natural resources for the benefit of future generations. Policy Measures

3.1 Identify, define and promote energy efficient technologies;

3.2 Promote the use of energy efficient technologies; and

3.3 Develop a framework to regulate the importation and use of energy efficient technologies.

4.2.4 Sustainable Exploitation of Biomass Objective 4. To promote sustainable exploitation of biomass and alternative energy to wood fuel resources in order to increase socio-economic development. Policy Measures

4.1 Promote efficient and sustainable exploitation of biomass for household utilization;

4.2 Promote the use of alternatives to wood fuel;

4.3 Promote biofuels in the national fuel mix; and

4.4 Ensure that the use of biofuels for the energy market is given priority without compromising food security.

4.2.5 Exploitation of Renewable Energy Objective 5. To increase exploitation of renewable energy in order to diversify the energy mix. Policy Measures

5.1 Strengthen institutional capacity for research in renewable energy;

5.2 Enhance coordination among key stakeholders for effective implementation of renewable energy technologies; and

5.3 Promote wider usage of renewable energy technologies.

4.2.6 Access to Electricity Objective 6. To increase access to electricity in order to improve the livelihoods of citizens. 20 Policy Measures

6.1 Expand generation, transmission and distribution capacity;

6.2 Increase access to electricity in rural areas

4.2.7 Petroleum Products Objective 7 To ensure adequate, reliable and affordable supply of petroleum products and natural gas in order to increase security of supply of petroleum products. Policy Measures

7.1 Enhance mechanisms for the development and effective management of the petroleum sub-sector;

7.2 Ensuring full capacity utilization of existing petroleum infrastructure;

7.3 Promote investments in the petroleum infrastructure;

7.4 Ensure the effective and efficient pricing of petroleum products;

7.5 Strengthen mechanisms aimed at ensuring uniform pricing of petroleum products across the Country; and

7.6 Petroleum Sub-Sector Infrastructure development.

4.2.8 Private Sector Participation Objective 8. To promote private sector participation in the Energy Sector in order to ensure sustainable growth of the sector. Policy Measures

8.1 Promote citizen owned entities in the development of the energy sector;

8.2 Ensure cost reflective pricing in the energy sector; and

8.3 Develop standardised Transaction Documents.

4.2.9 Innovation, Research and Development Objective 9. To promote innovation, research and development in the energy sector in order to accelerate technological advances. 21 Policy Measures

9.1 Enhance the adaptation of innovation, research and development in all spheres of the energy sector;

9.2 Facilitate partnerships between research institutes and all stakeholders in the sector; and

9.3 Enhance institutional capacities to enable them conduct scientifically objective studies in the energy sector.

4.2.10 Gender, Climate Change, Health and Safety Objective 10. To mainstream gender, climate change, and health and safety in the energy sector Policy Measures:

10.1 Increase systematic mainstreaming of gender in the energy sector;

10.2 Increase systematic mainstreaming of climate change in the energy sector; and

10.3 Increase systematic mainstreaming of health and safety in the energy sector. 22 CHAPTER FIVE IMPLEMENTATION FRAMEWORK The realisation of the Vision, Strategic Objectives and Policy Measures set out in this Policy shall largely depend on the following implementation framework:

5.1 Institutional Arrangements The effective implementation of the NEP 2019 will be achieved through collaborative efforts by all stakeholders at national, provincial and district levels as follows: Cabinet Office: Provide the overall leadership and guidance in the coordination and implementation of this Policy. Ministry of Energy: Oversee and ensure the effective implementation of measures stipulated in this policy nationwide Ministry of Finance: Ensure sufficient financial resources are allocated in the annual national budgets for the implementation of the policy.; Ministry of National Monitoring and Evaluating the overall implementation of Development Planning: the Energy Sector programmes. Ministry of Justice: Review and strengthen the legal framework to the energy sector ensuring, and not limited, provisions for emergency situations; open access regime; and establishment of Energy Fund. Line Ministries Support the implementation of this policy by ensuring that the activities outlined in this policy are budgeted for by the relevant line ministries in their annual budgets. 23 The Energy Regulation Monitor the efficiency and performance of licensees and Board: enterprises in the energy sector as well as establishment and management of the Energy Fund. Zambia Atomic Energy Cause the formulation and implementation of the Nuclear Agency: Energy Policy. Zambia Statistics Coordinate the development of a comprehensive energy Agency: sector Statistical database. Implementing These Agencies will develop and maintain energy Agencies: infrastructure; comply with licence conditions; comply with • ZESCO Limited, Energy Infrastructure and quality standards; implement • REA, ZRA, energy efficiency and conservation measures; ensure citizen • TAZAMA, participation in development initiatives; and utilize M&E • INDENI. findings to inform programme and resource allocation decisions. Local Authorities: Facilitate provision of necessary facilities for development of energy sector. Private Sector/Non-State Support the implementation of energy sector activities Actors: outlined in this Policy. Traditional Leaders and Facilitate community consultations in implementation of on Local Communities: energy sector projects. The Media: Facilitate and disseminate information on energy plans, programmes and projects

5.2 Legal Framework In accordance with the institutional arrangements as set up under the NEP 2019, the Government shall facilitate the review of various pieces of legislation, codes, regulations and guidelines relating to energy provision in order to develop an appropriate, broad-based and 24 comprehensive regulatory framework. The pieces of legislation which require review include but not limited to: the Electricity Act, Chapter 433 of the Laws of Zambia, the Energy Regulation Act, Chapter 436 of the Laws of Zambia, the Rural Electrification Act No. 20 of 2003 and the Petroleum Act Chapter 435 of the Laws of Zambia.

5.3 Resource Mobilisation and Financing Implementation of the NEP 2019 will require adequate human, financial, material and technical resources. The Government shall have the primary responsibility of committing adequate financial resources for the implementation of the Policy. The Government will also establish the Energy Fund. This Fund will facilitate the development of the entire energy sector.

5.4 Monitoring and Evaluation The implementation of this Policy shall be closely monitored to ensure that it is adequately institutionalised in line with its objectives. The Ministry of Energy shall develop and implement an Energy Sector Monitoring and Evaluation Plan to ensure effective monitoring and evaluation of the Policy. The NEP 2019 shall undergo a mid-term review after five years and a final term review after ten years. The mid-term assessment shall focus on progress made in the implementation of the policy and assess the appropriateness of the overall strategic direction. It shall therefore be designed to inform the remaining period of the policy and recommend adjustments where need be. The final evaluation shall be undertaken after ten years and will focus on impact of the NEP 2019 implementation. 25 ANNEX: IMPLEMENTATION PLAN OF THE NATIONAL ENERGY POLICY 2019 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective1: To strengthen institutional capacity in the energy sector in order for them to be more responsive to the energy needs of the country. Enhance human resource capacity Undertake gap analysis MOE, ERB in the energy sector Gap Analysis ZESCO, REA x 300,000 undertaken INDENI, TAZAMA, MDD Conduct benchmarking study in Benchmarking Study order to realign institutional x MOE, MDD 200,000 undertaken mandates Recruitment MOE, PSMD Staff recruited x 100,000 Training Staff trained x x x x x MOE, PSMD 2,500,000 Transformation of ERB to an MOE, ERB, MDD Authority established x 200,000 authority Re-engineering of OPPPI MOE, OPPPI, OPPPI re-engineered x 300,000 MDD Develop a client service charter Client service charter MOE x 500,000 developed conduct stakeholder mapping Stakeholder Mapping x MOE 100,000 conducted Establish an energy sector advisory Energy sector advisory x MOE 100,000 committee committee established Signing of MoUs MOUs signed MOE, ERB 500,000 Establish coordination ZESCO, REA x x x x x x INDENI, mechanisms for institutions in the energy sector. TAZAMA Develop an integrated plan Integrated plan MOE, ERB 200,000 developed ZESCO, REA x x x x x x INDENI, TAZAMA Develop a Management Information Management MOE, SZI, MNDP 2,000,000 System to enhance coordination Information System x among stakeholders developed 26 Creating a one stop shop that One stop shop created MOE, ERB, 1,000,000 streamlines processes for investment x MLNR, ZEMA, in the energy sector NHCC, WARMA, MLG Sensitization on One stop shop Sensitization conducted MOE, 200,000 x x x x x MIBS Facilitate and promote capacity MOE, ERB building for private sector ZESCO, REA institutions Conduct Gap Analysis Report of Gap analysis x INDENI, 300,000 TAZAMA, PSMD, CPs, Private Sector MOE, ERB ZESCO, REA Design and implement training Training Programs x x x x x INDENI, 2,500,000 Programs designed TAZAMA, PSMD, CPs, Private Sector MOE, ERB ZESCO, REA x INDENI, OMCs, Hold Energy Symposiums Symposiums conducted x x x x x 12,000,000 TAZAMA, Financial Institutions Establishing and building of offices Offices established and MOE, MHID x x x x x x 250,000,000 in provinces built MOE Decentralize energy institutions Procure operational vehicles Vehicles procured x 10,000,000 Procure office equipment for Office equipment MOE x x x x x 2,000,000 provinces procured MOE, ERB x ZESCO, REA Review existing energy funds Energy funds reviewed 100,000 INDENI, TAZAMA, MOF To facilitate the establishment MOE, ERB and management of the energy ZESCO, REA fund Harmonise the various funds Funds Harmonized x Neutral INDENI, TAZAMA, MOF MOE, ERB Amend all relevant laws Laws amended x x ZESCO, REA 2,000,000 27 INDENI, TAZAMA, MOJ, MOF, CABINET OFFICE MOE, ERB Energy Fund ZESCO, REA Create the energy fund x 1,000,000 Established INDENI, TAZAMA, MOF MOE, ERB Create a permanent committee for Energy fund committee ZESCO, REA x 100,000 management of Energy Fund established INDENI, TAZAMA, MOF MOE, ERB ZESCO, REA Prepare Regulations for management Regulations formulated INDENI, x 1,500,000 of energy funds and adopted TAZAMA, MOJ, MOF, CABINET OFFICE 28 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective2: To strengthen the energy sector regulatory frameworks in order to be more responsive to the energy needs of the country. Strengthening the mandate of Energy Regulation Act Review and amend the Energy MOE, ERB the Energy Regulator of 2003 reviewed and x Neutral Regulation Act Cap 436 of 2003 ZESCO, REA amended Review and amend the Electricity Electricity Act of 2003 MOE, ERB x Neutral Act Cap 433 of 2003 reviewed and amended ZESCO, REA Review and amend the Rural Rural Electrification MOE, ERB x x x ZESCO, REA 2,000,000 Electrification Act of 2003 Act of 2003 amended MOE, ERB Review and amend the Petroleum Petroleum Act ZESCO, REA x x 1,000,000 Act Cap 435 reviewed and amended Prepare a Statutory Instrument to MOE, ERB enforce a life-line tariff for ZESCO, MOJ SI enacted x x 50,000 electricity to protect low income households MOE, ERB Undertake sensitization on energy Sensitization ZESCO, REA x x x x x x 2,000,000 sector legislation Undertaken Establish the regulatory MOE, ERB, frameworks for off-grid Conduct assessments of existing Resource assessments ZESCO, REA, systems; x CPs, Private 500,000 regulations conducted Sectors MOE, ERB, ZESCO, REA, Develop Regulations Regulations developed x CPs, MOJ, Private 500,000 Sectors 29 Implement and enforce regulations ERB Regulations implemented and x x x x x 1,000,000 enforced Strengthen and harmonise Undertake Comparative studies to MOE, ERB, standards with regional and benchmark Benchmark Studies ZESCO, ZABS, x x x 2,000,000 international regulations and undertaken REA conventions where appropriate Adopt relevant standards and Standards adopted MOE, ERB, conventions x x x x x ZESCO, REA, ZABS 1,600,000 Prepare a Statutory Instrument for MOE, ERB, enforcement of standards SI enacted x x x x x ZESCO, REA, ZABS Undertake sensitization and Awareness campaigns MOE, ERB, awareness campaigns undertaken x x x x x ZESCO, REA, 5,000,000 ZABS Implement and enforce of standards Standards implemented ERB, MOE, and enforced x x x x x ZABS, ZCSA 1,000,000 Facilitate the adoption of the Review the relevant regulatory ERB, MOE open access regime in the framework on open access regime Regulations drafted 50,000 country x Undertake consultations with MOE, ERB, stakeholders on open access regime Consultations ZESCO, MOJ Undertaken x 200,000 Amend the Regulations MOE, ERB, MOJ Regulations amended x x 250,000 Establishment of a system operator MOE, ERB System Operator x NEUTRAL established Enforce the Regulations ERB, MOE Regulations enforced x x x x x 1,000,000 Undertake an awareness campaign MOE, ERB, Awareness campaign on open access regime x x x x x x ZESCO 2,000,000 conducted 30 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (KW) Objective 3. To promote efficient use of energy resources in order to ensure sustainability Undertake consultative meetings to MOE, ERB, Consultative meetings review existing testing facilities and x ZEMA, CPS, 120,000 held guidelines. ZCSA and ZABS Develop and implement guidelines MOE, ERB, Guidelines developed x x x x x x for testing quality and efficiency of ZCSA,ZRA and 1,000,000 energy technologies ZABS MOE, ERB, Facilitate acquisition of testing x x ZABS, Equipment procured 5,000,000 equipment ACADEMIA, ZCSA AND CPs MOE, ERB, Review existing labelling standards Standards and x ZABS, 30,000 and practices. labelling reviewed Retailer and consumer bodies Design and adopt standards and MOE, ERB, Standards and labels labels x x ZABS, ZCSA 200,000 Promote the use of energy adopted efficient technologies. Undertake Sensitisation MOE, ERB, Sensitisation x ZABS and ZCSA, x x x x 2,000,000 undertaken ZRA Prepare a Statutory Instrument for MOE, ERB and enforcement of standards Standards adopted x x x ZABS 50,000 MOE, ZRA, MOF, ERB, CPs, Facilitate provision of incentives. Incentive provided x x x x x 10,000,000 MOE, Energy Facilitate the formation of energy Efficiency Industry body formally x x efficiency (Energy Service Professionals 500,000 established Companies) industry body. 31 MOE, Building codes MHI, NCC, EIZ Develop building codes x x x 200,000 developed Promote the adoption of Smart Metering ERB, MOE, and Adopt Smart metering x 250,000 innovative technologies in the Adopted ZESCO management and operation of ERB, energy delivery systems Adopt net metering Net Metering Adopted x MOE,CPCC,BRR 250,000 A and ZESCO 32 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective4: To promote sustainable exploitation of biomass and alternative energy to wood fuel resources in order to increase socio-economic development. Promote efficient and MOE, ERB, sustainable exploitation of ZESCO, REA, Develop a Biomass Strategy Strategy Developed x x 1,000,000 biomass for household MLNR, SNV, utilization. FAO MOE, ERB, Support private companies to Private companies ZESCO, REA, produce more efficient biomass cook x x x x x x 1,500,000 supported MLNR, SNV, stoves FAO MOE, ERB, Undertake joint operations for the Joint operations ZESCO, REA, x x x x x x 5,000,000 enforcement of biomass regulations Undertaken MLNR, SNV, FAO MOE, ERB, Conduct awareness campaigns on Awareness x x x x x x ZESCO, REA, 5,000,000 sustainable biomass utilisation campaigns conducted MLNR, SNV, FAO Conduct awareness campaigns on MOE, ERB, the use of efficient biomass Awareness conducted ZESCO, REA, x x x x x x 10,000,000 alternative technologies MLNR, CPs, CSOs MOE, ERB, Conduct awareness campaigns on Promote the use of alternatives Awareness conducted ZESCO, REA, the use of alternatives to wood fuel x x x x x x 5,000,000 to wood fuel MLNR, CPs, energy CSOs, MOA Design incentive guidelines for MOE, ERB, utilisation of alternatives to wood Incentive guidelines ZESCO, REA, x x 200,000 fuel designed ZRA, MOF, MOE, ERB, ZRA, Facilitate blending of biofuels National Biofuel Promote biofuels in the MOF,BAZ, (ethanol and biodiesel) with fossil blending programme x x x 5,000,000 national fuel mix INDENI, fuels operational TAZAMA 33 MOE, ERB, ZRA, MOF,BAZ, Hectarage of Energy Facilitate growing of energy crops x x x x x x INDENI, 15,000,000 crops TAZAMA, MOA, ZFU MOE, ERB, Design incentives and guidelines to Incentives and ZESCO, REA, x x 1,000,000 support investment in biofuels guidelines designed ZRA, MOF, MOE, ERB, Undertake biofuels and food security ZESCO, REA, Assessment undertaken x x 5,000,000 assessments ZRA ZFU, MOA,FAO MOE, ERB, ZRA, Construct facilities for storage of Storage facilities MOF,BAZ, x x x 1,200,000,000 biofuels constructed INDENI, TAZAMA MOE, ERB, ZRA, Ensure that the use of biofuels Construct facilities for blending of Blending facilities MOF,BAZ, x x x 100,000,000 for the energy market is given biofuels constructed INDENI, priority without compromising TAZAMA food security MOE, ERB, ZRA, MOF,BAZ, Develop strategy for utilization of x x INDENI, Strategy Developed 1,000,000 biofuels TAZAMA, MOA, ZFU, MLNR, FAO, SNV 34 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective5: To increase exploitation of renewable energy in order to diversify the energy mix. (DOE) MOE, ERB, Stakeholder mapping Stakeholder mapping of institutions ZESCO, REA, for institutions x x 1,000,000 involved in research ZARENA, SIAZ, undertaken ZOGT, CPs MOE, ERB, ZESCO, REA, ZARENA, SIAZ, Train staff in research tools for ZOGT, CPs, Staff trained x x x x x x 5,000,000 renewable energy PRIVATE SECTOR, ACADEMIA, MOHE, CSOs MOE, ERB, Strengthen institutional ZESCO, REA, capacity for research in Develop a Renewable Energy Renewable Energy ZARENA, SIAZ, x x 2,000,000 renewable energy Strategy and Action Plan Strategy developed ZOGT, CPs, PRIVATE SECTOR MOE, ERB, Resource assessments x ZESCO, REA, Conduct resource assessments x x x x x 5,000,000 conducted CPs, PRIVATE SECTOR MOE, ERB, ZESCO, REA, ZARENA, SIAZ, Conduct research in renewable Research in renewable x x x x x x ZOGT, CPs, 3,000,000 energy energy Conducted PRIVATE SECTOR, ACADEMIA Enhance coordination among MOE, ERB, key stakeholders for effective Sign MoUs with research institutions MoUs signed x x ZESCO, REA, 250,000 implementation of renewable ACADEMIA energy technologies Coordination meetings x MOE, ERB, Hold coordination meetings x x x x x 500,000 held ZESCO, REA, 35 ZARENA, SIAZ, ZOGT, CPs, PRIVATE SECTOR, ACADEMIA MOE, ERB, ZESCO, REA, ZARENA, SIAZ, Joint research work Undertake joint research work with ZOGT, CPs, with academic x x x x x x 5,000,000 academic institutions PRIVATE institutions undertaken SECTOR, ACADEMIA, CSOs MOE, ERB, ZESCO, REA, ZARENA, SIAZ, Conduct joint awareness campaigns Joint awareness x x x x x x ZOGT, CPs, on renewable energy campaigns conducted PRIVATE 5,000,000 SECTOR, ACADEMIA, CSOs MOE, ERB, ZESCO, REA, ZARENA, SIAZ, Conduct Networking campaigns on Networking campaigns x x x x x x ZOGT, CPs, RETS on RETS conducted PRIVATE 100,000 SECTOR, ACADEMIA, CSOs MOE, ERB, ZESCO, REA, ZARENA, SIAZ, ZOGT, CPs, Launch NEP 2019 NEP 2019 Launched x PRIVATE 200,000 SECTOR, ACADEMIA, CSOs MOE, ERB, Awareness materials ZESCO, REA, Design the awareness materials designed x x x x x x ZARENA, SIAZ, 200,000 ZOGT, CPs, 36 PRIVATE SECTOR, ACADEMIA, CSOs MOE, ERB, ZESCO, REA, ZARENA, SIAZ, awareness campaigns ZOGT, CPs, Conduct awareness campaigns conducted x x x x x x PRIVATE 5,000,000 Promote wider usage of SECTOR, renewable energy technologies ACADEMIA, CSOs Fiscal incentives Design and implement fiscal MOE, ERB, ZRA, incentives designed and x x MOF, BAZ, CCPC 200,000 implemented 37 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective 6: To increase access to electricity in order to improve the livelihoods of citizens MOE, ERB, REA, ZESCO, CSO, ZOGT, ZARENA, Integrated Resource Expand generation and Develop and implement an SIAZ, CSOs, CPs, Plan developed and x x x x x x 150,000 transmission systems Integrated Resource Plan MNDP, MOH, implemented MOA, MHID, MLG, CHAMBER OF MINES MOE, ERB, REA, Facilitate construction of power Power generation ZESCO, ZOGT, generation projects with diverse projects with diverse x x x x x x ZARENA, SIAZ, 25,000,000,000 energy mix energy mix constructed CPs, PRIVATE SECTOR Construct power generation stations Power Generation ZESCO, REA, 25,000,000,000 station constructed x x x x x x PRIVATE SECTOR Construct transmission lines Transmission lines and ZESCO, MOE, 5,000,000,000 including interconnectors interconnectors x x x x x x ERB, CEC, REA constructed Develop a framework for measuring Framework for MOE, ERB, REA, 5,150,000 energy access (Include, baseline and measuring energy ZESCO, CSO, monitoring) access developed ZOGT, NGO, x x CSOs, CPs, MNDP, MOH, MOA, MHID, Increase access to electricity in MLG rural and urban areas Formulate and implement an National Electrification MOE, REA, 4,500,000 integrated Electrification Pathway Strategy developed and ZESCO, ZOGT, (IEP) for universal access with a implemented x x NGO, CPs, supporting National Electrification MNDP, MOH, Strategy MOE, MHID, MLG 38 Develop a financing mechanism for IEP financing MOE, REA, 100,000 implementation of IEP for universal mechanism developed ZESCO, ZOGT, access NGO, CPs, x x MNDP, MOH, MOE, MHID, MLG Develop a geospatial least cost Geospatial least cost MOE, REA, 5,000,000 planning tool to enhance planning tool develop ZESCO, ZOGT, electrification NGO, CPs, x x MNDP, MOH, MOE, MHID, MLG Implement IEP IEP implemented MOE, REA, 200,000 ZESCO, ZOGT, NGO, CPs, x x x x MNDP, MOH, MOE, MHID, MLG MOE, REA ERB, Construct stand alone and off grid Stand alone and off CSO, ZOGT, systems (Solar Homes and Mini grid systems x x x x x x 25,090,000,000 NGOs, CSOs, CPs, grids) Constructed Private sector Extend the national grid to rural Grid extended to rural REA, ZESCO, x x x x x x 3,250,000,000 areas areas MOE, Grid extended to urban ZESCO, MOE, Extend the grid to urban areas x x x x x x 16,250,000,000 areas MLNR, MCT, Undertake densification and REA, ZESCO intensification on existing Households connected x x x x x x 520,000,000 MOE, distribution lines Undertake connection using ready Low income REA, ZESCO, x x x x x x 234,975,000 boards for low income households households connected MOE, 39 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective 7: To ensure adequate, reliable and affordable supply of petroleum products and natural gas in order to increase security of supply of petroleum products Enhance mechanisms for Develop a Petroleum Strategy and Petroleum Strategy and MOE, ERB, BAZ, 2,000,000 effective management and Action Plan; Action Plan developed INDENI, x x development of the petroleum TAZAMA, OMCs, sub-sector PTAZ Develop procurement, financial & procurement, financial MOE, ERB, 5,000,000 operational regulations for petroleum & operational INDENI, products regulations for x x x x x x TAZAMA, OMCs, petroleum products PTAZ developed Ensuring full capacity Rehabilitate TAZAMA Pipeline TAZAMA Pipeline MOE, ERB, 1,000,000,000 utilization of existing Rehabilitated x x x x x x INDENI, petroleum infrastructure TAZAMA, Rehabilitate INDENI refinery INDENI refinery MOE, ERB, 1,750,000,000 Rehabilitated x x x x x x INDENI, TAZAMA, Conduct routine maintenance for Routine maintenance MOE, ERB, 1,000,000 TAZAMA fuel depots for TAZAMA fuel INDENI, Conducted x x x x x x TAZAMA, Procure relevant equipment and Equipment and MOE, INDENI 1,000,000,000 material for INDENI refinery material for INDENI refinery Procured x x x Construct fuel depots Fuel depots MOE, ERB, 1,600,000,000 Promote investments in the Constructed TAZAMA, MHID, petroleum infrastructure MLNR, ZABS, x x x x x x MCTI, PRIVATE SECTOR, MOCTA, INDENI Construct rural filling stations Rural filling stations MOE, ERB, 1,000,000,000 Constructed TAZAMA, MHID, x x x x x x MLNR, ZABS, MCTI, PRIVATE 40 SECTOR, MOCTA, INDENI Recapitalise TAZAMA TAZAMA MOE, MOF, 100,000,000,000 Recapitalised TAZAMA, x x PRIVATE SECTOR Recapitalise INDENI refinery INDENI refinery IDC, MOE, MOF, 150,000,000,000 Recapitalised TAZAMA, x x PRIVATE SECTOR Construct Zambia - Angola pipeline Zambia - Angola MOE, ERB, 500,000,000,000 pipeline Constructed MOF, TAZAMA, MHID, MLNR, x x x ZABS, MCTI, PRIVATE SECTOR, MOCTA, INDENI. Facilitate Construct Zambia – Zambia – Mozambique MOE, ERB, MOF, 500,000,000,000 Mozambique pipeline pipeline Constructed TAZAMA,MHID, MLNR, ZABS, x x x MCTI, MOCTA, INDENI, PRIVATE SECTOR, Construct refinery plants Refinery plants MOE, IDC, ERB, 250,000,000,000 Constructed TAZAMA, MHID, MLNR, ZABS, x x x MCTI, PRIVATE SECTOR, MOCTA, INDENI Construction of fuel depots in Fuel depots in Eastern, MOE, ERB, MOF, 6,400,000 Eastern, Central, Southern and Central, Southern and TAZAMA, MHID, Northern Provinces Northern Provinces MLNR, ZABS, x x x x x x Constructed MCTI, PRIVATE SECTOR, MOCTA, INDENI 41 Hold bilateral meetings with the Bilateral meetings held MOE, MOF, 1,500,000 Tanzanian Government on Single x x MNDP, Point Mooring; TAZAMA, ERB Ensure the effective and Quarterly review of petroleum Petroleum pricing ERB, MOE, MOF, 5,000,000 efficient pricing of petroleum pricing to reflect existing market reviewed MCTI, TAZAMA, x x x x x x products. dynamics. INDENI, OMCs Develop a risk management plan for risk management plan ERB, MOE, MOF, 250,000 price stability developed x x MCTI, TAZAMA, INDENI, OMCs Conduct joint inspections on joint inspections ERB, MOE, MOF, 5,000,000 operations that affect pricing in the conducted MCTI, TAZAMA, x x x x x x sector INDENI, OMCs, MHA Engage in long term supply contracts Long term contracts MOE, ERB, MOF, 4,500,000 with Petroleum suppliers signed TAZAMA, MHID, MLNR, ZABS, x x MCTI, PRIVATE SECTOR, MOCTA, INDENI Strengthen mechanisms aimed Review the operation of the uniform Operation of the MOE, ERB, UPP 500,000 at ensuring uniform pricing of pricing of petroleum uniform pricing of x x x x x x MANAGER, MOF petroleum products across the petroleum reviewed Country Undertake joint inspections Joint inspections MOE, ERB, UPP 200,000,000 undertaken x x x x x x MANAGER, MOF, MHA Undertake monitoring and inspection Monitoring and MOE, ERB, UPP 6,000,000 inspection undertaken x x x x x x MANAGER, MOF 42 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective 8: To promote private sector participation in the Energy Sector in order to ensure sustainable growth of the sector Promote citizen owned entities MOE, MOF, 2,500,000 Provide incentives to the private Incentives to the in the development of the x x x x x x MCTI, ZRA, sector private sector provided energy sector BRRA, ERB, Provide capacity building in MOE, MOF, 5,000,000 Capacity building development and management to x x x x x x MCTI, ZRA, provided energy service companies BRRA, ERB, MOE, ERB, MOF, 100,000 TAZAMA, MHID, MLNR, Identifying of investment Investment x x x x x x ZABS, MCTI, opportunities opportunities Identified PRIVATE SECTOR, MOCTA, INDENI MOE, ERB, MOF, 1,000,000 TAZAMA, Develop a framework to promote MHID, MLNR, local participation in the energy Framework developed x x ZABS, MCTI, sector PRIVATE SECTOR, MOCTA, INDENI MOE, ERB, MOF, 5,000,000 TAZAMA, MHID, Conduct awareness campaigns on Awareness campaigns MLNR, ZABS, investment opportunities and x x x x x x conducted MCTI, PRIVATE incentives SECTOR, MOCTA, INDENI Ensure Cost reflective Pricing MOE, ERB, 1,500,000 Carry out regular cost of service Cost of service studies in the energy sector x x x ACADMIA, REA, studies undertaken CSOs, ZIPAR Multi-year tariff 5,000,000 Implement a multi-year tariff ERB ZESCO, framework for x x x framework for electricity MOE, CCPC, CSO electricity implemented 43 ERB, MOE, 3,000,000 ZESCO, Establish price regulation for all Price regulation for all PRIVATE x x customer categories customers established SECTOR, CCPC, ZIPAR, PMRC, CSOs, MOE, ERB, MOF, 1,000,000 TAZAMA, Consultative Meetings with relevant MHID, MLNR, Consultative Meetings stakeholders to identify the x x ZABS, MCTI, undertaken transaction documents. PRIVATE SECTOR, MOCTA, INDENI MOE, ERB, 1,000,000 ACADEMIA, Develop standardized Review existing transaction Transaction documents x x REA, PRIVATE Transaction Documents documents reviewed SECTOR, ZIPAR, MOHE MOE, ERB, 500,000 ZESCO, Develop and Implement ACADEMIA, Transaction documents Standardised Transaction x x REA, CPs, developed Documents PRIVATE SECTOR, ZIPAR, MOHE 44 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective 9: To promote innovation, research and development in the energy sector in order to accelerate technological advances MOE, ERB, 1,500,000 ZESCO, ACADEMIA, Mapping of Research institutions in Research institutions x x MOHE, PRIVATE the energy sector. Mapped SECTOR, ZIPAR, PMRC, ZARENA, ZOGT, SIAZ, MOE, ERB, 200,000 ZESCO, Facilitate partnerships between ACADEMIA, Undertake consultations with Consultative Meetings research institutes and all x x x x x x MOHE, PRIVATE stakeholders undertaken stakeholders in the sector SECTOR, ZIPAR, PMRC, ZARENA, ZOGT, SIAZ, MOE, ERB, 1,000,000 ZESCO, ACADEMIA, Joint research Undertake joint research x x x x x x MOHE, PRIVATE undertaken SECTOR, ZIPAR, PMRC, ZARENA, ZOGT, SIAZ, MOE, ERB, 3,000,000 ZESCO, ACADEMIA, Conduct trainings in the energy Training conducted x x x x x x MOHE, PRIVATE Enhance institutional sector on research methods SECTOR, ZIPAR, capacities to enable them PMRC, ZARENA, conduct scientifically ZOGT, SIAZ, objective studies in the energy MOE, ERB, 500,000 sector ZESCO, Sign MoUs with research institutions MOUs signed x x ACADEMIA, MOHE, PRIVATE SECTOR, 45 IMPLEMENTATION YEARS ESTIMATED RESPONSIBLE POLICY MEASURES ACTIVITIES INDICATORS COST UNIT 2020 2021 2022 2023 2024 2025 (ZMW) Objective 10: To mainstream gender, climate change, and health and safety in the energy sector. MOE, MoG, ERB, 200,000 ZESCO, REA, Gap analysis in gender Undertake a gap analysis in gender x x PRIVATE undertaken SECTOR, CPs, CSOs 100,000 MOE, MOG, ERB, Internship and ACADEMIA, Undertake internship and mentorship mentorship KGRTC, ZESCO, programmes targeting the under- x x x x programmes REA, PRIVATE represented gender undertaken SECTOR, INDENI, TAZAMA Increase systematic mainstreaming of gender in the energy sector MOE, MOG, ERB, ACADEMIA, Energy sector gender Develop an energy sector gender KGRTC, ZESCO, strategy and action plan x x 500,000 strategy and action plan REA, PRIVATE developed SECTOR, INDENI, TAZAMA MOE, MOG, ERB, Undertake affirmative action ACADEMIA, measures in employment and on Affirmative action KGRTC, ZESCO, x x x x x x Neutral boards to Promote balanced measures undertaken REA, PRIVATE representation by gender SECTOR, INDENI, TAZAMA 46 MOE, MOG, 1,500,000 ERB, ACADEMIA, KGRTC, ZESCO, Train staff in gender mainstreaming Staff trained x x x x x x REA, PRIVATE SECTOR, INDENI, TAZAMA MOE, MOG, 300,000 ERB, ACADEMIA, KGRTC, ZESCO, Align the energy sector with REA, PRIVATE Energy sector aligned SECTOR, nationally determined contributions x x x x x x to NDC INDENI, (NDC). TAZAMA, CPs, CSOs, ZEMA 2,300,000 Increase systematic mainstreaming of climate change in the energy sector MOE, MOG, ERB, ACADEMIA, Measures to protect KGRTC, ZESCO, Cost and undertake measures to climate vulnerable REA, PRIVATE protect climate vulnerable people x x x x x x people and their SECTOR, and their activities activities undertaken INDENI, TAZAMA, CPs, CSOs, ZEMA MLNR Awareness materials on MOE, MOH, 250,000 Promote health and safety in Develop awareness materials on health and safety in the ERB, x x x x x x the energy sector health and safety in the energy sector energy sector ACADEMIA, developed KGRTC, ZESCO, 47 REA, PRIVATE SECTOR, INDENI, TAZAMA, CPs, CSOs, ZEMA, MSD MOE, ERB, 600,000 ACADEMIA, KGRTC, ZESCO, REA, PRIVATE Undertake awareness campaigns in Awareness campaigns SECTOR, x x x x x x the utilisation of energy undertaken INDENI, TAZAMA, CPs, CSOs, ZEMA, MOH, MSD, MOE, ERB, 600,000 ACADEMIA, KGRTC, ZESCO, REA, PRIVATE Enforce regulations on health and Regulations on health SECTOR, x x x x x x safety and safety enforced INDENI, TAZAMA, CPs, CSOs, ZEMA, MOH, MSD, 48