Southern African power trading opens up as Zambia brings traders onto ZESCO’s network
The 2024 Electricity (Open Access) Regulations let private intermediaries sell directly to customers for a wheeling fee, and roughly a quarter of trades on the regional exchange are no longer long-term bilateral contracts. Stanbic is preparing a procurement programme that aggregates demand across several mining offtakers.
Under Zambia’s Electricity (Open Access) Regulations, introduced in 2024, companies licensed by the Energy Regulation Board can sell electricity directly to customers, using ZESCO’s transmission and distribution network in return for a wheeling fee. Africa GreenCo, Enterprise Power, Petrodex and Kanona all now operate on that basis.
The reform followed a period of severe load shedding, and its first effect was to bring in supply ZESCO could not finance along. GreenCo funded $50 million of electricity imports during the crisis to keep mining customers running. Zambia’s installed capacity stands at about 3,985MW with hydropower above 80% of it, a mix that leaves industrial users exposed to a dry year on the Zambezi.
The market those traders sell into is the Southern African Power Pool, founded in 1995 and now covering 12 member countries. On its own figures it serves more than 360 million people and coordinates around 47.7GW of operational capacity. A day-ahead market has run since 2009, with intra-day and forward markets added in 2015. Norton Rose Fulbright puts competitive trading at roughly a quarter of trades, with long-term bilateral contracts still holding the rest.
What holds liquidity back is not the design of the market. A trade agreed on the platform cannot always be delivered, because the constraint sits on the interconnectors between national grids rather than inside any one of them. The Southern African Development Community is preparing a Regional Transmission Infrastructure Financing Fund aimed at 10 to 15 cross-border links.
The next stage is being built around the buyers. Stanbic Bank Zambia is preparing ZAMWatt, a procurement programme designed to work under the open access framework with several independent producers supplying several offtakers at once, aggregating demand across mining loads alongside ZESCO. ZimWatt in Zimbabwe and KWatt in the Katanga province of the Democratic Republic of Congo are intended to follow the same shape. Zambia’s Ministry of Energy released a Competitive Procurement Framework for private renewable investment in May.
Ilute, the 32MWp merchant solar project in Zambia’s Western Province, reached financial close in January on a market-based sale through GreenCo rather than a state offtake. The market it sells into is the one now being assembled around it.
