A Tariff Framework for Renewable Mini-Grids in Zambia

DT Global is currently implementing the Increased Access to Electricity and Renewable Energy Production Project (IAEREP).

Optima Energy Consulting is the prime subcontractor providing economic regulation support to the Energy Regulation Board (ERB). This includes supporting the country’s electrification efforts by developing a tariff framework which sets a predictable pricing policy for Mini-Grid developers. The tariff framework aligns with the requirements of the Energy Regulation and Electricity Acts and proposes that Mini-Girds below a certain installed capacity are exempted from economic regulation. Mini-grids that are not exempted are regulated through building-blocks with a multi-year tariff period. The allowed revenues are separately allocated in the modeling in order to enable the implementation of versatile grid encroachment policies and the WACC features a flexible gearing ratio to ensure that investments with lower gearing ratios are adequately accounted for in the allowed return.

IAEREP is funded by the European Union.

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