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Viable tariffs to spur investment in energy sector


BUUMBA CHIMBULU writes

COMMERCIAL-LEVEL tariffs remain key to attracting investment in the energy sector as it will encourage the projects to be bankable, says Stanbic Bank Zambia head of corporate and investment banking, Helen Lubamba

Ms Lubamba said commercial-level tariffs provided capacity to service loans and attract new investment.

Ms Lubamba however explained that key to financing an energy project understood the full cost and the project’s ability to price and sell the product to off-takers.

She was speaking at the just ended ninth Zambia International Mining and Energy Conference and Exhibition (ZIMEC).

She was speaking in a panel discussion on financing bankable energy projects at the event, which was held under the theme “Creating an attractive investment framework to catalyse Zambia’s mining and energy sectors.”

 “The size of funding needed called for cross-border dollars, but this was becoming prohibitively expensive due to country risk premiums being applied which are directly relating to sovereign rating,” Ms Lubamba said.

Ms Lubamba said Zambia’s conducive business environment put the country in an advantageous position to attract investment in the energy sector and other related industries.

She said Zambia had potential and room for investment and growth in the power sector and related industries.

Ms Lubamba said Stanbic Bank was seeing diversification of the energy sector to include upgrading of investment in solar power becoming a significant addition to hydro-power supply thanks to innovative new funding structures.

She highlighted the four ways of funding energy projects: bilateral debt arrangements, concessional funding in partnership with development finance institutions, equity funding and capital markets.

“One of the pillars in terms of our purpose in Zambia is to develop our country with a big focus on natural resources and other areas that help to drive our country forward. Energy clearly sits right in the middle of that in terms of our focus on growing the energy portfolio,” Ms Lubamba said.

Ms Lubamba said Stanbic remained committed to providing innovative financial solutions and tangibly contributing to the Zambian economy.

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