Zambia’s Power Crisis: A Deficit and an Opportunity in One

By BARNABAS ZULU

WHEN the lights flicker out in Lusaka’s compounds and mines downshift operations in the Copperbelt, the cost of Zambia’s electricity deficit becomes painfully clear. But as the country scrambles to fill a growing power gap, a quiet transformation is taking place — one that’s reshaping who supplies power, how it’s traded, and who profits.

Zambia is currently experiencing an electricity deficit of over 750 megawatts, a shortfall driven primarily by the reduced ability of its hydroelectric power plants to produce enough electricity due to insufficient water levels. This drop in generation capacity is further compounded by surging demand from key economic sectors such as mining, agriculture, and the broader pressures of a growing population and economy. For ZESCO, the state-owned power utility, this combination of high demand and low supply has become quite a storm — one that threatens both economic stability and public confidence.

Yet, in this crisis lies a new reality: the electricity sector is transforming. Concepts that were virtually unknown just a few years ago, such as power trading, are now emerging strongly and booming within the market. It is no longer business as usual.

“ZESCO simply doesn’t have the financial muscle to import the amount of power needed to meet national demand on its own,” says Energy Minister Makozo Chikote. “This is why we opened up the market — to allow independent power traders to come in and help fill the gap.”

This policy shift is reshaping the country’s energy landscape. One of the biggest beneficiaries of this change is Copperbelt Energy Corporation (CEC). Originally established as a supplier of electricity to Zambia’s mines, CEC has since evolved into a major player in the regional energy trading ecosystem.

“CEC is not just supplying the mines anymore,” Chikote explains. “It’s also exporting power to the DRC and leveraging the open access model to engage in cross-border electricity deals.”

Thanks to progressive regulatory reforms — including the introduction of the 2024 Electricity (Open Access) Regulations — private companies such as GreenCo, Enterprise Power, Petrodex, and Kanona can now operate legally and competitively within Zambia’s power market. These firms are licensed by the Energy Regulation Board (ERB) and are allowed to use ZESCO’s transmission and distribution infrastructure by paying wheeling fees, which compensate ZESCO for the use of its network.

“These companies are helping ZESCO by importing power and supplying it to industrial customers,” says Chikote. “They aren’t taking from ZESCO—they’re buying from regional suppliers and easing the burden on our national grid.”

This arrangement is crucial, especially as Zambia seeks to maintain power supply to energy-intensive industries while minimizing load shedding for households. What we are witnessing is not just a response to a short-term crisis, but the birth of a more flexible and diversified energy system.

For CEC, this moment is not just about plugging a temporary hole in the supply. It’s about future-proofing its entire business model. The company has built strategic partnerships with utilities and power producers across the Southern African Power Pool (SAPP), positioning itself as a regional hub for energy trading and smart energy solutions.

Meanwhile, critics—primarily from opposition parties and civil society groups—have raised concerns. They argue that the government is sidelining ZESCO and allowing private players to profiteer from a national crisis. Some have even labeled the policy shift as a “backdoor privatization” of the country’s most strategic public utility. But Minister Chikote disagrees.

“This is not about middlemen. This is about survival,” he says. “ZESCO still imports power directly from EDM in Mozambique, ZESA in Zimbabwe, and Eskom in South Africa. But it has to pay upfront because of its past credit problems.”

Indeed, the financial strain on ZESCO has deep roots. The utility’s debt once stood at $1.8 billion in 2021, owed to nearly every utility in the region and to independent power producers at home. That figure has now been significantly reduced to around $260 million, thanks to restructuring and improved revenue collection. But the scars remain — and they continue to force ZESCO to import cautiously. That hesitation creates an opening for private traders who have stronger balance sheets and access to quicker financing.

Companies like GreenCo, for example, have stepped into that gap. GreenCo financed $50 million worth of electricity imports during a recent power crisis in order to supply mining clients in Zambia. Similarly, Enterprise Power has focused on cross-border trading with countries like the DRC and Namibia, meeting energy demand where ZESCO could not.

These are not just emergency interventions; they are part of a broader shift in how energy is viewed — not just as a public utility but also as a tradable commodity. It’s a new business model, built for a new era, in which energy security, market flexibility, and economic opportunity are tightly linked.

The question now is no longer whether power trading is legal — that debate is settled. It is legal, regulated, and already functioning. The real question is whether Zambia can strike the right balance between ensuring national energy security and creating room for private sector innovation and investment.

“We must make peace with the fact that the market has changed,” Chikote says. “What we need now is smart regulation, strong partnerships, and continued investment in our own generation capacity.”

Zambia’s future energy strategy must now focus not only on improving its hydroelectric capacity but also on diversifying its energy mix. This includes solar farms, wind power, biomass, and small-scale hydro projects that are less vulnerable to climate fluctuations. The government, alongside development partners and private investors, is already rolling out projects aimed at improving generation capacity and boosting grid resilience.

Programs like the GET FiT Zambia initiative and funding from international financial institutions have begun paving the way for solar and renewable energy expansion. Additionally, the country has shown interest in entering long-term Power Purchase Agreements (PPAs) with reliable producers — both domestic and regional.

If managed wisely, this crisis could indeed be a turning point — not only to keep the lights on in homes and industries, but to light the way toward a more modern, inclusive, and resilient energy system. The key lies in ensuring that reforms are implemented transparently, that competition is fair, and that the benefits of a more dynamic electricity market are passed on to the ordinary Zambian.

As the country pushes forward with its energy expansion plans, Zambia stands at a crossroads. Will it cling to the past, or will it embrace a new model—one that balances public service with private sector efficiency?

The current crisis may just be the painful nudge the country needed — not just to maintain basic power supply, but to reimagine what the future of energy can look like for generations to come