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Scaling Solar's first auction in Zambia sets new regional benchmark for low-cost solar power

Zambia set a new benchmark for low-cost solar power in Africa on Monday with a competitive auction organized by Scaling Solar, a World Bank Group program that removes obstacles to large-scale solar power in developing countries.
The auction will help Zambia's Industrial Development Corporation (IDC) add clean and affordable power capacity in a country where only one-fifth of the population has access to electricity and two years of drought have crippled existing hydropower facilities

The winners of the Scaling Solar auction, confirmed today in Lusaka, are Neoen S.A.S. and First Solar Inc., who jointly bid to produce solar power at just 6.02 cents per kilowatt hour, and Enel S.A., which bid 7.84 cents per kilowatt hour. IFC, a member of the World Bank Group, designed and helped IDC run the tender, which attracted 48 solar power developers, seven of whom submitted final proposals.

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

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

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

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

Additional information: Scaling Solar
News date: 13/06/2016

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