The encyclopedia · Strategy & Leadership · Strategic decision · 2018–2021
Zambia's no-subsidy solar tender hit Africa's first sub-4¢ tariff
GET FiT Zambia's 120 MW solar tender — no grants, standardized documents — drew a record-low bid of 3.999 US¢/kWh.
Government of Zambia (Ministry of Energy) · GET FiT Zambia · KfW
The solution
Zambia's grid was overwhelmingly hydroelectric, and GET FiT Zambia — the implementing program for the country's REFiT strategy, supported by German cooperation through KfW — tendered 120 MW of solar PV to diversify the mix. The solar tender opened in February 2018 with a pre-qualification stage followed by a combined technical and financial bid.
The design removed the usual crutches: no grant financing, no concessional loans, developers had to find their own sites and pay for shallow grid connection, and a rapid grid assessment ran before bids. Standardized bankable documents and a regional liquidity support facility made finance accessible instead of subsidized.
In April 2019 the Ministry of Energy announced six awards totaling 120 MWac. The lowest successful bid was 3.999 US cents per kWh and the weighted average 4.41 cents — the first time a public tender in sub-Saharan Africa produced a tariff below 4 cents, and the region's largest single solar tender outside South Africa.
Why it worked
- Standardized documents made bids directly comparable, so competition was real.
- No grants or concessional finance meant the tariff reflected true market cost.
- Developers' own sites and grid fees kept hidden costs out of the comparison.
- A pre-bid grid assessment stopped winners that could never connect.
What can be applied
What makes an auction cheap is not subsidies but bankable, comparable bids on a level playing field; strip out the hidden handouts and prices fall.
Aftermath
The record price reset expectations for African solar procurement; the awarded projects moved toward construction with local university training partnerships, and GET FiT Zambia later applied the model to small hydro and solar-plus-storage.
Sources
spotted an error? The archive wants to know.