IEEE Power & Energy Magazine - July/August 2014 - 40

If India is to achieve a balanced economic development,
the number of households with access to modern sources
of energy must increase significantly and dramatically.

and political interference in the selection of projects. Moreover, the levy was not remitted consistently or in full. this
prompted further changes to the institutional arrangements
for providing electricity access to rural dwellers.
in 2003, the rural electrification Authority was created
through an act of Parliament, and it became operational in
2004. its functions were set out as follows:
✔ to administer and manage the rural electrification Fund
✔ to implement and update the rural electrification Master Plan for the systematic electrification of rural areas
✔ to promote utilization of available technological options
for rural electrification to enhance the contribution of
energy to the development of agriculture, industry, mining, and other economic activities in rural areas
✔ to promote private-sector participation in rural electrification projects through the provision of well-designed subsides, competitive bidding, and community mobilization

Electricity
Levy
Pegged
at 5% of all
Electricity
Bills

Ministry
of
Finance

REA

Other
Funding
Sources:
Mainly
Donors and
World Bank

Implementing
Agents
(ZESCO and
Private Players)

figure 3. The current framework for funding rural electrification in Zambia (in effect since 2004).

figure 4. Photovoltaic power for a rural community in
Zambia (photo courtesy of PowerGen Renewable Energy).
40

ieee power & energy magazine

✔ to finance project preparation studies for rural electrifi-

cation projects in accordance with guidelines developed
and approved by the rural electrification Authority.
the current framework for rural electrification is shown in
Figure 3. A notable feature of the arrangements is the participation of private-sector players in the implementation of rural
electrification projects. this should bring efficiency in the use
of available resources, as projects are awarded on a competitive basis. once commissioned, projects are handed over to
ZeSco to operate. it is worth noting that Zambia has a liberalized electricity market providing for private-sector operators
of electricity generation, transmission, and distribution assets
as well as retail activities. Many rural electrification projects
have been undertaken under this framework.
despite initial success, there are still some issues with the
present framework for rural electrification. Funds collected
through the levy are not always transferred to the rural electrification Authority in full or on time by the national treasury.
the current levy is inadequate to fund the projected annual
expenditure of US$50 million per year to achieve the target
of an electricity access rate in rural areas of 51% by 2030. A
lack of confidence on the part of the donor community in the
governance of the rural electrification Authority has resulted
in diminished funding. And unfortunately, the process of project selection and funding is still prone to political interference.
it is fair to say, however, that the present institutional
framework for administering rural electrification is sound.
the failures observed above are principally rooted in the
implementation and governance of the scheme. the key
issue in rural electrification remains inadequate funding and
identification of sustainable models for rural electrification.
For Zambia to achieve the ambitious target of reaching
51% access in rural areas by 2030, the following proposals
should be considered seriously:
✔ there is a need to unlock private-sector capital and innovation in the mobilization of resources. the conventional
approach to rural electrification has not changed much
over the last 50 years, with three-phase grid connections
and diesel being the main options. in recent times, solar
PV has been promoted (see Figure 4) as well as mini hydro
installations. this must continue. there is also a need to
actively promote other technologies for electrification,
including biomass and wind (where feasible) as well as
single-wire earth return systems for grid extensions.
✔ rural electrification policy must create the conditions
for sustainable, locally anchored and driven businesses.
july/august 2014



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IEEE Power & Energy Magazine - July/August 2014 - Cover3
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