Download Executive Directors Meeting - 2/16/2017 - Zambia

Republic of Zambia: West Lunga Scaling Solar Energy Project
Chair Summary*
February 16, 2017
Executive Directors of IDA approved an IDA Guarantee in the amount of up to US$3.5 million
and the Board of Directors of IFC approved IFC financing consisting of an “A” Loan in the amount
of up to US$15 million, a senior loan of up to US$15 million from IFC acting as implementing
entity of the IFC-Canada Climate Change Program (IFC-CCCP), and one or more U.S. Dollar
interest rate swaps representing a loan equivalent exposure of up to US$3 million, for the West
Lunga Scaling Solar Energy Project on the terms and conditions set out in the President’s
Memorandum.
Directors expressed strong support for the operation, highlighting its innovative nature, and the
application of the comparative strength of the World Bank Group in deploying complementary
IDA and IFC instruments. Directors supported the development of low cost affordable solar in
Sub-Saharan Africa, starting in Zambia, and looked forward to the expansion of other projects in
this Region. In this regard, they encouraged lessons and evaluations to be shared with other
countries considering scaling solar.
Directors welcomed the steps taken by the World Bank Group to build the Scaling Solar Program
to meet the power deficit challenges faced by many client countries in an affordable manner. They
noted the need to continue to pursue storage solutions to increase capacity. They highlighted
financial sustainability risks of the sector and encouraged staff to continue to work with the
Government and the utility, to keep improving sector’s operational and financial sustainability,
and supervise implementation of the ongoing investments in the distribution and transmission
network. In this regard, they recognized the need to build further institutional capacity and called
for strong Bank support to ensure the program is well implemented and sustainable. There were
also questions related to pricing and tariff reform, noting the overall objective of reaching cost
recovery levels while considering energy affordability of poor households. Directors also inquired
about the use of concessional and blended financing instruments in this case.
Finally, Directors were pleased with the use of the Infrastructure Cascade, and the catalytic use of
the combined IDA Guarantee and IFC Loans to leverage private investments into the power sector.
They applauded the team for the cascade which showcases the comparative advantage of
integrating all available instruments.
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*This summary is not an approved record.