Short Term Policy & Regulatory Review Expert for Zambia Electric Cooperative Development Program (ZECDP)

1.0 Background of ZECDP

NRECA International is a rural development organization with the mission to increase access to reliable electric services in developing countries. Since 1962, NRECA’s programs have focused on improving and expanding electric infrastructure, establishing self-sustaining and well-managed electric utilities, and providing technical assistance to national electrification planners. NRECA is currently working on three continents to provide expertise in the establishment and support of electric cooperatives; renewable energy on-grid and off-grid utility design and start-up: geospatial platforms for electrification investment planning; universal electrification access strategy planning; utility benchmarking and service improvements; construction supervision; smart grid planning and implementation; and engineering design and analysis.

In October 2021, Zambia Electric Cooperative Development Program (ZECDP), funded by USAID, was launched to increase access to electricity in rural areas through the development of sustainable electric cooperative enterprises. ZECDP is designed to demonstrate that the community-owned electric cooperative business model can play an important role in the expansion of electricity service to rural communities.

A collaboration between REA and NRECA, as the implementing partners of ZECDP, was formalized in a Memorandum of Understanding (MOU) dated August 2022. Under the MOU, REA and NRECA have agreed to jointly undertake projects, capacity building, and training activities to develop and strengthen electric cooperatives in line with the objectives of ZECDP through September 2026.

The goals of ZECDP include the following:

• Increased access to electric service in multiple rural communities Demonstration that a sustainable and robust service provider model that is community-based offers potential for increased local investment and for project success that is not solely driven by profitability; and
• Increased personal income-generating activities for cooperative members through productive uses of energy.

In order to achieve the above objectives, ZECDP focuses on the following activities:

• Activity 1: Site identification and development
• Activity 2: Community engagement and mobilization
• Activity 3: Supporting cooperatives from the design to operations phase, including formation and legal registration.
• Activity 4: Mentoring cooperatives during operations phase with customized technical assistance and the development of productive use of energy programs, where warranted.
• Activity 5: Evaluation of the legal and regulatory framework to ensure an enabling environment conducive to electric cooperative development
• Activity 6: Research on the impacts and benefits of cooperative enterprises.

2.0 Context and Justification for the Assignment

Energy is an enabler for sustainable development and a key resource for increasing opportunities and improving livelihoods. The off-grid market in Zambia has evolved significantly in the last few years, with a shift to more renewable energy solutions. However, access to electricity, especially in the rural areas, remains a challenge, with a significant percentage of the rural population still underserved and unserved. To increase electricity access, the Government of the Republic of Zambia (GRZ) has been working to create an enabling environment for attracting investment into the energy sector. To strengthen the electricity regulatory environment, GRZ revised the National Energy Policy. Electricity Act and Energy Regulation Act in 2019. The National Electrification Strategy and the Renewable Energy Strategy were also developed in 2022 to support the legal framework of the energy sector.

The cooperative business model has been in Zambia since 1914. The legal instruments for management of the cooperatives in Zambia are the Cooperative Societies Act No. 63 of 1970 and the cooperative rules of 1972. This Act provides guidance on the cooperatives’ operations from formation to insolvency.

As of 2019, according to the Registrar of Cooperative Societies, the total number of registered cooperatives in Zambia was over 9,400. with over 1.5 million members. In rural communities. cooperative businesses have been formed to engage in agriculture and banking (credit unions, lending circles). The cooperative business model has proven to contribute significantly to economic growth if its principles are followed including support for robust governance. However, cooperatives have not been formed to engage in commercial electric service in Zambia to date.

The ZECDP intends to demonstrate that the electric cooperative business model can play a complementary role to other electrification initiatives to support the GRZ’s goal of universal energy access for all Zambians. ZECDP can provide a foundation for not only improving electrification access, but catalysing community collaboration, and supporting agricultural and commercial enterprises. It can also lead to economic growth through income generation, and investment in productive uses of electricity in each electric cooperative utility.

A prerequisite of supporting sustainable rural electric cooperatives is the presence of legal and regulatory provisions that will provide guidelines for governance, institutional oversight, access to capital and a clear pathway to registration and licensing for newly formed electric cooperatives. It is therefore necessary to review existing legal and regulatory provisions to determine if existing laws, policies and regulation will provide sufficient support. If existing laws, policies and regulations do not yet exist, there will be a need to identify the actions required by the GRZ to support electric cooperative formation, to issue licenses and to allow electric cooperatives to establish cost-based tariffs to achieve financial self-sustainability. In addition, a pathway to provide financing options to finance infrastructure and working capital will also be required. Lastly, there will be a need to define how performance monitoring will be managed to ensure service quality, as well as sources for training & capacity building for electric cooperative boards, management and staff.

Towards these goals, ZECDP wishes to engage a short-term policy and regulatory specialist to analyse the existing national legislations, regulations and policies relevant to electric cooperative formation in Zambia. The consultant will identify any gaps in relation to the enabling environment for the development and successful operation of viable electric cooperative enterprises.

The objective of this analysis will be to recommend changes or modifications in policies and regulations that may be required to support electric cooperatives formation and successful operation in Zambia. The study will also provide strategies for advocating for the necessary changes with appropriate stakeholders. The results of the study will serve to solidify and evidence to the government and other stakeholders to support the success of ZÉCOP and sustain the initiative beyond the life of ZECDP

Application mode

Interested candidates can request for the Terms of Reference (either as a team or individually) at the following address: NRECA.Lusaka@nreca-intl.org by 15th September 2023 Submission of “The Expression of Interest by 30” September 2023