Zambia Secures $1.5bn Power Deal With CMEC

Zambia has formalised a $1.5 billion investment agreement with China Machinery Engineering Corporation (CMEC) to deliver an additional 900 MW of generation capacity, marking a significant step in efforts to stabilise the country’s power system and reduce exposure to climate-driven supply risks.

The deal, concluded in partnership with the Zambia Development Agency, aligns with Lusaka’s long-term objective of scaling installed capacity to 10,000 MW by 2031. It follows sustained pressure on the national grid, where drought conditions have curtailed hydropower output, resulting in recurring load-shedding and operational constraints across key industries.

Hydropower remains the backbone of Zambia’s electricity mix, leaving the system vulnerable to hydrological variability. Declining reservoir levels in recent seasons have highlighted structural weaknesses in generation diversity, prompting policymakers to accelerate investment in alternative and complementary energy sources.

Under the CMEC framework, the 900 MW will be developed through three parallel 300 MW projects across solar, wind and coal-fired thermal generation. The portfolio approach is designed to balance intermittent renewable capacity with dispatchable baseload power, enhancing grid reliability while advancing energy transition objectives. Project execution is expected to proceed concurrently, a move aimed at compressing delivery timelines and enabling faster integration into the national grid.
CMEC is expected to deploy technical teams to Zambia by mid-2026 to initiate feasibility studies, environmental and social impact assessments, and site selection processes ahead of construction.

For the private sector, improved power availability could materially strengthen productivity in mining, manufacturing and agro-processing sectors that have absorbed the brunt of supply interruptions. Greater reliability is also likely to reduce reliance on costly backup generation, easing operating expenditures.

From a regional perspective, increased capacity positions Zambia to expand its participation in the Southern African Power Pool, with the potential to export surplus electricity to neighbouring deficit markets. This could open additional revenue channels while reinforcing regional energy integration.

The agreement further reflects sustained investor interest in Zambia’s infrastructure pipeline and signals continued collaboration with Chinese partners in strategic energy development and industrial expansion.