Energy

ZAMBIA ENERGY SECTOR KEY FIGURES 2025, GDP, CAPACITY, MIX

Zambia’s electricity, gas and air conditioning supply sector contributed 1.48% to GDP in 2025, its nominal value up 64% on the back of tariff increases even as real output was roughly flat, while installed generation capacity grew to 3,886 megawatts in 2025 from 3,318 megawatts in 2021, as the government targets raising the non-hydro renewable share of generation to 33.0% from 3.0%.

Hydropower still supplies over 80% of generation, but solar is by far the fastest-growing part of the mix: 125 megawatts of solar capacity have already come onto the grid, with a further 1,500 megawatts expected within 12 months of the 2026 Budget Speech and 300 megawatts of new thermal capacity from Maamba due in 2026, as the government pursues energy diversification after the 2024 drought exposed the risks of hydropower dependence.

Sector Size

Electricity, gas, steam and air conditioning supply contributed 1.48% of Zambia’s nominal GDP in 2025, or ZMW 10.73 billion of the ZMW 725.6 billion total, up sharply in nominal terms from ZMW 6.53 billion, or 0.99% of GDP, in 2024^[1]. That nominal jump was driven overwhelmingly by price rather than volume: in real terms the sector’s output was essentially flat, down 0.2% in 2025, indicating the nominal growth reflects tariff and cost increases more than higher generation^[1].

Generation Capacity and Mix

Zambia’s national installed electricity generation capacity, including on-grid and off-grid systems, rose to 3,886 megawatts in 2025, up from 3,318 megawatts in 2021, driven in part by energy sector reforms that opened generation, distribution, importing and exporting to private players alongside ZESCO^[4]. Over 80% of that capacity is hydropower^[4], consistent with the Ministry of Energy’s more granular 2024 breakdown of 3,871.37 megawatts, up from 3,811.37 megawatts in 2023^[2]. Zambia also trades power regionally through the Southern African Power Pool, with licensed traders exporting to the Democratic Republic of Congo and South Africa and importing from Mozambique and South Africa^[2].

Hydropower

Hydroelectric plants dominate the generation mix at 82% of installed capacity^[2]. ZESCO’s Kafue Gorge (990 megawatts) and Kafue Gorge Lower (750 megawatts) are the country’s two largest stations, followed by Kariba North Bank (720 megawatts) and its extension (360 megawatts) and Victoria Falls (108 megawatts)^[2]. Smaller ZESCO hydro stations include Lusiwasi and its upper extension (12 and 15 megawatts), Musonda Falls (10 megawatts), Lunzua River (14.8 megawatts), Chishimba Falls (6 megawatts) and Shiwang’andu (1 megawatt)^[2]. Independent hydro producers add further capacity: Itezhi-tezhi Power Corporation’s plant of the same name (120 megawatts) and Lunsenfwa Hydro Power Company’s Lunsemfwa and Mulungushi stations (24 and 32 megawatts)^[2].

Coal

Coal contributes 9% of installed capacity, led by Maamba Energy Limited’s 300 megawatt Maamba Power Plant and Dangote Cement Zambia’s 30 megawatt Dangote Power Plant^[2].

Solar

Solar contributes 5% of installed capacity, growing from 34 megawatts to 94 megawatts between 2023 and 2024 at the Kitwe plants (Itimpi and Riverside) operated by Copperbelt Energy Corporation alone^[2]. Bangweulu Power Company’s 54 megawatt plant and Ngonye Power’s 34 megawatt plant, both in the Lusaka South Multi-Facility Economic Zone, are the two other large solar installations, alongside dozens of smaller solar vending-machine and mini-grid sites run by Rural Electrification Authority partners and independent operators across the country^[2].

Other Thermal

Ndola Energy Company’s 110 megawatt heavy fuel oil plant is the largest non-hydro, non-coal thermal station, alongside smaller diesel plants operated by Copperbelt Energy Corporation at Bancroft, Kankoyo, Luano and Maclaren, and by ZESCO at Chama, Lundazi and Shang’ombo^[2].

The Hydropower Shortfall

Drought conditions cut hydropower output sharply. National electricity generation in the first half of 2024 totalled 8,113.02 gigawatt hours, down about 14.5% from 9,486.19 gigawatt hours in the first half of 2023^[2]. The decline was concentrated at Zambia’s two largest stations: Kafue Gorge generated 3,187.35 gigawatt hours in 2024, down from 3,805.87 gigawatt hours in 2023, while Kafue Gorge Lower generated 1,547.54 gigawatt hours, down from 2,193.73 gigawatt hours^[2].

The Solar Build-Out

The government’s response has centred on solar. ZESCO’s Director of Power Generation said in May 2025 that Zambia was on track to add between 500 and 800 megawatts of solar electricity to the national grid by the end of 2025, part of a broader push toward a targeted 1,000 megawatts of solar capacity under President Hakainde Hichilema’s energy diversification agenda^[3]. The 100 megawatt Chisamba solar project was set to be the first major injection of that capacity into the national grid^[3]. Solar capacity had already grown at the Kitwe plants operated by Copperbelt Energy Corporation, from 34 megawatts in 2023 to 94 megawatts in 2024^[2]. The 2026 Budget Speech updated the build-out: 125 megawatts of solar capacity had come onto the grid, with a further 1,500 megawatts expected within the following 12 months and 300 megawatts of new thermal capacity from the Maamba plant due in 2026, all aimed at lifting the non-hydro renewable share of generation to 33.0% from 3.0%^[4]. Government is also promoting solar installation for public institutions, households and businesses, and has already installed solar energy in all 116 district councils to reduce the impact of load shedding^[4].

Rural Electrification and Regional Interconnection

Since 2022, 130 Rural Electrification Programme projects have been completed, comprising 104 on-grid and 26 off-grid projects, lifting rural electricity access to 34.0% from 8.0% in 2021^[4]. Government plans a further 100 on-grid and 30 off-grid projects in 2026^[4]. Zambia’s connection to the Southern African Power Pool cushioned the impact of the 2024 drought by allowing power imports and exports as needed, and works are due to start in 2026 on an interconnector between Zambia and Tanzania that would extend Zambia’s regional grid access to Kenya, Uganda and Ethiopia^[4].

Policy Framework

The Ministry of Energy’s National Energy Policy 2019 sets a vision of universal access to clean, reliable and affordable energy at the lowest total economic, financial, social and environmental cost by 2030, with the overall objective of establishing Zambia as a net exporter of energy^[5]. Its ten policy objectives include strengthening institutional and regulatory frameworks, promoting efficient use of energy resources, increasing exploitation of renewable energy, expanding access to electricity, ensuring adequate and affordable petroleum supply, promoting private sector participation, and mainstreaming gender, climate change, health and safety considerations^[5]. Reforms since have included the Multi-Year Tariff Framework, the Electricity Open Access Framework, the Net Metering Policy Framework and the Energy Single Licensing System, alongside a planned Electricity Fund to strengthen electricity security and supply stability^[4]. In the petroleum sub-sector, the TAZAMA Open Access Framework has liberalised petroleum transportation since its implementation, allowing Oil Marketing Companies to transport diesel through the TAZAMA pipeline and improving transparency and efficiency in fuel procurement^[4].

Investment Opportunities

The gap between Zambia’s hydropower-dependent installed base and its 33.0% non-hydro renewable target represents the clearest near-term investment opportunity in the sector, alongside the transmission and grid-integration capacity needed to absorb the 1,500 megawatts of solar generation expected within 12 months of the 2026 Budget Speech^[2][4]. That the sector’s real output was flat even as tariffs rose also points to a system still short of the generation growth needed to meet demand, reinforcing the case for new capacity rather than price alone closing the gap^[1]. The planned Electricity Fund and the Zambia-Tanzania interconnector, alongside continued Rural Electrification Programme rollout, extend that opportunity into transmission, distribution and rural supply infrastructure^[4]. Zambia’s single-buyer market structure, with ZESCO as the sole off-taker and bulk retailer, is the framework any new generation project needs to work within^[2].

Last Update: August 2026

References

1. Zambia Statistics Agency, Final Annual GDP release, sectoral data
2. Ministry of Energy, Energy Sector Overview
3. ZESCO Limited, Approximately 500-800MW of Solar Electricity Expected to Be Added to the National Grid by December
4. Ministry of Finance and National Planning, 2026 Budget Speech
5. Ministry of Energy, National Energy Policy 2019