FAQ

Regulatory Framework for Mini-Grids

What is the regulatory framework for mini-grids?

In October 2018 the Energy Regulation Board approved a regulatory framework for mini-grids in Zambia.

This framework is being road tested, and may be adjusted in line with learnings from, amongst others, mini-grid projects implemented by the Rural Electrification Authority, before regulations are gazetted.

The regulatory framework was developed in consultation with key stakeholders, including government, private sector, civil society and development partners.

The mini-grid regulatory framework comprises the following documents:
1. Executive Summary of the Licensing and Regulatory Framework;
2. Standard Licence to Generate, Distribute and Supply Electricity for a Mini-Grid Electricity System;
3. Rule on Tariffs Applicable to Mini-Grids in Zambia; and
4. Technical Requirements for Mini-Grid in Zambia.

Are explanatory documents regarding the regulatory framework for mini-grids available?

The Energy Regulation Board held a workshop regarding the new regulatory framework for mini-grids in March 2019, to provide clarity for stakeholders. In addition, it issued responses to questions raised on the framework. The following relevant documentation is available:

1. Panel discussion: Practical Capacity Building Workshop of 6th March 2019 by ERB, IAEREP TA1 and TA2 chaired by ERB, available at: http://www.erb.org.zm/downloads/technical/2019-03-06_Workshop_Presentations_Mini_Grid_Regulatory_Framework.zip

2. Responses by the ERB to specific aspects raised in the open letter by the Mini-Grid Industry Representatives, available at: http://www.erb.org.zm/downloads/technical/Q&A_Mini_Grid_Regulations_Roadtesting.pdf




What licence do I need to obtain from the Energy Regulation Board for mini-grid systems that sell electricity and when should this be obtained?

A Combined Generation, Distribution and Supply Licence needs to be obtained from ERB before commissioning and starting to generate electricity, but after the completion of construction.

What if the generated electricity will be exclusively for own use?

If the capacity of the generation unit is 100kW or higher, a generation for own use licence must be obtained from the Energy Regulation Board (ERB), before commissioning and starting to generate electricity, but after completing the system.

If the capacity of the generation unit is up to 100kW, an exemption for a licence may be granted by ERB. In this context, own use means that electricity can only be used by those who produce it and is not transferable either commercially or for in-kind consideration.


How do I obtain the required licences for my off-grid project?

To review all of the steps and documentation needed for permitting and licensing a mini-grid system, please visit the Licensing section of this portal.

 

Investment Support and Incentives

Is there an online source of general information for investors?

The I-Guides Zambia, available at https://www.theiguides.org/public-docs/guides/zambia, are a source of general information to investors on a broad range of issues, including:

  • Business registration and types of incorporation
  • Employment, wages and benefits 
  • Investment permits
  • Investor rights (investment protection, expropriation, dispute settlement, repatriation of funds, etc.)
  • Categories of land, systems of tenure, conditions for land acquisition and transfer, and typical land prices
  • Taxation types and rates, including customs and excise duties
The guides are are also posted on the Zambia Development Agency website.


What support is available to off-grid developers?

Developers considering an investment in off-grid systems in Zambia can contact the Zambia Development Agency (ZDA) who can support developers in liaising with the Energy Regulatory Board, Office for Promoting Private Power Investment, Zambia Revenue Authority, Zambia Environmental Management Agency, and Ministry of Lands, Natural Resources and Environmental Protection, amongst others, with regards to the required approvals and licences for off-grid systems. ZDA has a One-Stop-Stop - at http://www.zda.org.zm/?q=content/one-stop-shop - providing both local and foreign investors with business-friendly registration services with the aim of reducing the cost of doing business.

What is an Investment Certificate?

An Investment Certificate is a document issued by the Zambia Development Agency (ZDA), following a developer or investor's application for a registration of a planned investment with ZDA. Holders of an Investment Certificate are eligible for certain investment incentives and can receive support from ZDA in engaging with public entities in Zambia.

The certificate is optional and there is no minimum investment required.

It can be obtained through the ZDA website - http://www.zda.org.zm/eservices/index.php/investment-certificate.html. A processing fee of ZMW 2,133.30 is due upon submission of the application and a certificate fee of ZMW 12,783.30 upon issuance of the certificate.

Provided that the application is complete and the details meet all minimum requirements, issuance of the certificate should take three days.

Are there any non-fiscal or fiscal incentives for off-grid investments in Zambia?

Holders of an Investment Certificate that are investing in a multi-facility economic zone, industrial park, priority sector, or rural enterprise (as defined by the Zambia Development Agency Act), subject to certain criteria, are eligible for fiscal and/or non-fiscal incentives.

Developers investing more than USD 500,000 (or equivalent in other currency) in off-grid electricity generation may be entitled to:

  • Accelerated depreciation of capital expenditure
  • Zero % import duty on capital goods, machinery, and specialized motor vehicles for five years

Developers can also receive non-fiscal incentives, including investment guarantees, protections against nationalization, and facilitated issuance of an investor's work permit.

Developers investing USD 250,000 to USD 500,000 (or equivalent in other currency) are entitled only to the non-fiscal incentives mentioned above.

Furthermore, losses can be carried forward for up to 10 years in the case of electricity generation projects.

Micro and small enterprises in urban areas may be exempt from income tax for the first three years of operation, while those in rural areas may be exempt for the first five years.

 


 

Manufacture, wholesale import and installation of solar energy systems

Who can engage in business activities to manufacture, wholesale, import and install solar products?


Anyone is it at liberty to engage in the aforementioned business activities. However, one needs to be aware that these are regulated activities. Therefore, one must obtain the necessary legal rights to engage in one or more of them. This requirement extends to both individual people and incorporated bodies.


Do I need a licence to engage in manufacturing, wholesaling, importing and installing solar energy systems? What should I do to obtain it?

Yes, it is necessary to obtain a licence prior to commencing operations. The process for obtaining a licence is presented under the Licensing section of this portal.



Do I need a licence to import solar equipment, if this is for own use?

No. However, a one-off licence waiver is required, which is a regulatory consent granted by the ERB to anyone importing solar energy products for own use. In this context, own use means the product can only be used by those who bought it and is not transferable commercially or used for any kind of entrepreneurial purposes.




What if my solar power generation facility is less than 100 kW and is solely for my own use?

You are required to obtain a licence to generate, transmit, distribute and supply electricity. An exemption for such a licence may be granted if the generation facility has less than 100 kW installed capacity and is solely for one's own use. However, you still must meet the criteria and apply for the grant of a one-off licence waiver to import the solar energy products that will be used in this system.


What if my system is 100 kW or more and is solely for my own use?

A one-off licence waiver to import the solar products that will be used in this system must be obtained from the Energy Regulation Board.



How much does it cost to obtain a one-off licence waiver for solar equipment import?

The Energy Regulation Board does not charge a fee for this service. Just submit a formal written application requesting for a one-off licence waiver. The application should be accompanied by information such as, but not limited to, consignment notices, a clear description of the intended use of the products and location where they will be used or installed.


Are there any standards with which imported solar equipment should conform?

Imported solar energy equipment or products must conform with certain technical standards. You should familiarise yourself with the requirements prescribed in the applicable standards. For instance, if you are going to import solar lighting devices, ensure that the specifications are met with Zambian Standards (ZS) 407: Lighting Devices for Use in photovoltaic systems. Then ZS 403 specifies minimum requirements for different types of batteries for use in photovoltaic systems.

Solar panels should be accompanied by a certificate of conformity issued in accordance with ZSIEC 61215: Terrestrial photovoltaic modules - Design qualification and type approval. Contact either the Energy Regulation Board or the Zambia Bureau of Standards for a complete list of applicable standards.


When can I contact the Energy Regulation Board (ERB) if I want to import?

It is essential that you contact the ERB early enough in your planning stages in order to address any regulatory requirements which may impede your business at a later stage if not adhered to.

Those considering importing solar energy, products but are not sure of the steps to follow, can contact ERB at their offices in Lusaka, Kitwe, Livingstone and Chinsali, or call the ERB Toll Free Line 8484.

 

Standards

Are there standards regarding generation and storage which are applicable to off-grid solutions?

The following Zambian Standards (ZS), amongst others, may be applicable:

  • ZS 403: 2016 Batteries for Use in Photovoltaic Systems – Specification: Specifies minimum requirements for batteries for use in photovoltaic systems
  • ZS 404: 2016 Charge Controllers for Photovoltaic Systems Using Lead-Acid Batteries – Specification: Specifies the requirements for charge regulators which must be fitted on all battery- based photovoltaic electric systems
  • ZS 405: 2016 Photovoltaic Systems Design and Installation – Code of Practice: Provides requirements for designing and installing photovoltaic energy systems in structures such as houses, schools, offices and industrial buildings
  • ZS 407: 2016 Second Edition Lighting Devices for Use in Photovoltaic Systems – Specification: Specifies minimum requirements for lighting devices for use in photovoltaic systems powered with direct current or alternating current and may have an inverted ballast or driver current
  • ZS 908 Biogas systems – Code of Practice – Part 1: Design, Installation, Operation and Maintenance of Biogas Systems: Provides requirements for designing, installing, and operating and maintaining stand-alone biogas systems
  • ZS 908 Biogas Systems – Code of Practice – Part 2: Biogas Micro-grids: Provides requirements for the supply of biogas to third parties via micro grid connected to biogas plant(s) with one or more users in pipe
For more information, please contact the Zambia Bureau of Standards, the Energy Regulation Board and the National Council for Construction Zambia.

Are there standards regarding distribution which are applicable to off-grid solutions?

The following Zambian Standards, amongst others, may be applicable:

  • Distribution Grid Code, 2016: Establishes the basic rules, procedures, requirements and standards that govern the operation, maintenance, and development of the electricity Distribution Systems in Zambia to ensure the safe, reliable, and efficient operation of Distribution System.
  • ZS 907-1: 2015 Electricity Distribution Infrastructure – Application Guide – Part 1: Construction (Design, Selection, Installation and Commissioning): Covers the planning, design, construction, installation, and commissioning of AC distribution networks ranging from 220 volts single phase to 33 kV three phase
  • ZS 746-1: 2013 Off-Grid and Rural Grid Extension Systems – Specification – Part 1: Outdoor Distribution Cut-Outs – Dropout Fuse Link Assemblies or Solid-Link Assemblies – Pole-Mounted Types: Covers outdoor distribution cut-outs for pole mounting, i.e. complete drop-out single-vented, expulsion fuse-link assemblies and solid-link assemblies intended for overload/short-circuit protection
  • ZS 746-2: 2013 Off-Grid and Rural Extension Systems-Specification – Part 2: Outdoor Distribution Cut-Outs-Expulsion Fuse-Links: Covers the minimum requirements for expulsion fuse-links for application with drop-out fuse-link assemblies, as specified in ZS 746-1, at nominal AC voltages of 11 kV, 22 kV, and 33 kV (19 kV SWER)
  • ZS 746-3: 2013 Off-Grid and Rural Grid Extension Systems-Specification – Part 3: Low-Voltage (600/ 1000 V) Cable Systems for Underground Electrical Distribution – Cables: Specifies the requirements for the construction and testing of the following low-voltage cables used for underground electrical distribution: PVC insulated, aluminum wire armored, single-core copper cables, and PVC insulated, steel wire armored, and two-, three- and four-core copper cables
  • ZS 746-4: 2013: Off-Grid and Rural Grid Extension Systems – Specification – Part 4: for Underground Electrical Distribution - Accessories : Specifies the requirements for the materials, construction and testing of low voltage accessories that are used with cables for underground electrical distribution
  • ZS 746-5: 2013 Off-Grid and Rural Grid Extension systems – Specification – Part 5: Low-Voltage (600/1000 V) cable Systems for underground electrical distribution-code of practice : Code of practice for the selection, handling and installation of low voltage (600/1000 V) electric cables and accessories for underground electrical distribution
  • ZS 746-6: 2013 Off-Grid and Rural Grid Extension systems – Specification – Part 6: Wood poles, Cross-Arms and Spacer Blocks : Sets out the requirements for all wood poles, cross-arms and spacer blocks for electric power applications
  • ZS 746-7: 2013 Off-Grid and Rural Grid Extension Systems – Part 7: Quality of Supply and Safety : Sets minimum standards for the quality of electricity supplied by electricity undertakings to end consumers in off grid and rural grid extension systems
  • ZS 148: 2000 Wooden poles and cross-arms for electric power and telephone lines

Are there standards regarding power quality and reliability which are applicable to off-grid solutions?

The following Zambian Standards (ZS) may be applicable::

  • ZS 387: 2014 Power Quality Management System (PQMS) – Part 1: Overview of implementation of standards and procedures; Part 2: Minimum standards; Part 3: Measurement and reporting procedures; Part 4: Application guidelines for enterprises; Part 5: Instrumentation and transducers for voltage quality monitoring and recording: Focuses on continuous monitoring of the power quality performance of the Zambian grid and improvement over time. The Zambia PQMS provides a framework for implementation of the Power Quality Directive. It also provides the rights and responsibilities of all stakeholders (the licensees, customers and equipment suppliers) in the electricity supply industry.
  • ZS 397: 2015 Electricity Supply – Quality of Consumers Service – Specification: Addresses quality in reference a range of topics, such as the construction of overhead lines and the requirements for batteries for solar systems

For more information, please contact the Zambia Bureau of Standards, the Energy Regulation Board and the National Council for Construction Zambia.


Are there standards regarding customer interface and metering which are applicable to off-grid solutions?

The following Zambian Standards (ZS) may be applicable:


  • ZS 640-647: 2006 Electricity metering: metering equipment, data exchange, tariff and load
    control    : Defines boxes that contain electrical meters, with an emphasis on electro-mechanical meters
  • ZS 418 The Electrical Safety Code Part 1: Construction, installation and commissioning rules: Covers rules for the practical safeguarding of persons, domestic animals, property and the environment from the hazards of electrical practices employed by a system during and after construction, installation and commissioning
  • ZS 791: 2014 Wiring of Premises Code of Practice: Covers the rules for the design, selection, erection, inspection and testing of electrical installations, and applies to electrical installations, such as those for residential, commercial, public, and industrial premises, among others
  • ZS 419: 2000 Small power distribution unit (ready board) for single-phase 230V services connection – Specification: Specifies requirements for distribution boxes that are ready-wired with socket outlets, with or without a permanently wired luminaire, primarily intended for use in low cost housing

For more information, please contact the Zambia Bureau of Standards, the Energy Regulation Board and the National Council for Construction Zambia.