UEF launches financing mechanism to expand energy access in Zambia

Today, in support of His Excellency President Hakainde Hichilema’s initiative to electrify 1,000 mini-grids across Zambia, the Zambia Energy Demand Stimulation Incentive (ZEDSI), was launched. ZEDSI is a new financial mechanism focused on supporting mini-grid developers as part of a larger Presidential Initiative to reach 1,000 communities that was announced at COP28. Led by Sustainable Energy for All (SEforAll) with support from the Government of the Republic of Zambia, the initiative has opened applications for private mini-grid developers to improve electricity consumption and fast track Zambia’s first 105 mini-grids.

ZEDSI aims to stimulate economic growth in rural communities through reliable solar mini-grids, optimized mini-grid business models, and the deployment of replicable, scalable energy solutions in challenging rural environments. ZEDSI will initially focus on deploying mini grids across 105 priority sites, positively impacting the livelihoods of 30,000 rural Zambians and enhancing the welfare of over 100,000 people by powering schools, hospitals, and other community institutions.

Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All, and Co-Chair of UN-Energy, said: "I join world leaders in commending His Excellency President Hakainde Hichilema’s commitment to accelerate the deployment of decentralized renewable energy solutions through the 1000 Mini-grid Initiative. Through the Zambia Energy Demand Stimulation Incentive (ZEDSI), which is implemented by Sustainable Energy for All (SEforALL)’s Universal Energy Facility (UEF) with funding support from The Rockefeller Foundation, we will support the commercial viability of mini-grid projects and bolster rural economic development across the country.”

ZEDSI is administered by the Universal Energy Facility (UEF), with financial support from The Rockefeller Foundation and the Global Alliance for People and Planet (GEAPP), while building on existing commitments from the European Union, Beyond the Grid for Africa, and The World Bank. Managed by SEforAll, UEF provides catalytic, results-based financing to clean energy companies, enhancing the viability of decentralized renewable energy (DRE) solutions and contributing to the socio-economic development of rural communities.

Under the ZEDSI mechanism, local and international clean energy companies can apply for a share of USD 1.4 million (approximately ZMW 37.5 million). This performance-based funding will support developers in driving electricity usage among rural micro-enterprises, such as agro-processing and irrigation, and public facilities including schools and clinics. By stimulating end-consumer demand, developers can increase utilization rates, lower operating costs, and boost revenue generation, thereby promoting resilience and sustainability in mini-grids. The ZEDSI incentive package will focus on driving entrepreneurial efforts and rural development, supporting an array of end-users, including households, public institutions, and businesses.

Ashvin Dayal, Senior Vice President, Power and Climate at The Rockefeller Foundation, said: “ZEDSI’s launch is an important milestone in Zambia’s drive to build a more sustainable, equitable energy system. We are proud to support H.E. President Hichilema’s efforts to scale solutions that can transform the country’s energy landscape—and with it, the lives of thousands of Zambians.”

Next, SEforAll will actively support the development of a national investment strategy to drive broader investment into Zambia’s rural electrification sector, with the ambition of significantly improving rural energy resilience and benefiting over one million people. This initiative complements other major financing efforts, such as The World Bank’s Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) Programme, anticipated to launch in mid-2025.

Click here to learn more about the ZEDSI incentive, including the application requirements. Only eligible mini-grid developers registered and operating in Zambia may apply.

The Universal Energy Facility (UEF), managed by SEforALL was established to accelerate and scale up energy access across Sub-Saharan Africa and beyond, in line with SDG7 and the Paris Agreement on Climate Change. The UEF provides incentive payments to clean energy companies deploying energy solutions and providing verified end-user electricity connections (via mini-grids and stand-alone solar systems) and clean cooking solutions based on pre-determined service standards.

The UEF currently works in six countries: Benin, the Democratic Republic of Congo (DRC), Madagascar, Nigeria, Sierra Leone and Zambia. To date, the UEF has financed 36 clean energy companies and helped catalyse over USD 17.2 million of commercial capital with over 8,976 electricity connections achieved through decentralized renewable energy projects in unserved communities. Over 40,000 people have benefitted from new or improved access to electricity. Nearly 3,000 businesses and public institutions, including schools and healthcare centres continue to receive reliable electricity, which is crucial for the development of rural communities.

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