UK aim to generate $3.1bn of private sector investment for the Zambian mining and renewable energy industries

The British Government has agreed to a partnership with Zambia covering clean energy and critical mineral supply worth more than $3.7bn (£2.91bn).

Under the clean energy and green investment partnership, the UK will aim to generate $3.1bn of private sector investment for the Zambian mining and renewable energy industries. A further $600m of funding will come in the form of UK Government-backed investments.

Approximately 70% of Zambia’s export earnings come from mining. In 2022, Zambia was the world’s eighth-largest copper producer, and second in Africa. In the same year, it was also the world’s 13th-largest cobalt producer.

Cobalt and copper are both vital components of lithium-ion batteries vital in the energy transition. Securing a consistent supply of both would aid Britain’s stated goals of reaching net-zero carbon emissions by 2050, and attracting investment into the country for transition technology producers such as battery makers.

The Zambian renewable energy sector will also receive investment. The country hosts a large share of the Zambezi River basin and hydroelectric power generates 94% of the country’s power mix, totalling 2,257MW. As a result, Zambia produces renewable electricity at a price of around 8¢ per kilowatt-hour (kWh), approximately half of the average cost in Africa, making the country a cheap yet bountiful site for renewable investments.

Solar energy investment is also an area of promise in Zambia, with the country averaging around 5.5kWh/m² of solar irradiation per day, showcasing the high potential for large-scale solar generation. Zambia experiences around 3,000 hours of sunshine annually.

In 2022, the UK Government stated its aim to diversify its critical mineral strategy by collaborating with international partners and enhancing overseas mineral markets. In 2019, Britain agreed to the UK-Zambia Green Growth Compact for collaboration with the country, on which the latest investments are based.

Following a visit to Zambia where the deal was agreed upon, British Foreign Secretary James Cleverly stated: “The UK-Zambia Green Growth Compact and our landmark agreement on critical minerals will support investment between UK and Zambian business, creating jobs in both countries and improving environmental and social standards.”

Zambia has previously been referred to as a “safe haven” for foreign direct investment into the mining and energy sectors.

 

By: Gary Kakompe

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