KGL Unveils 10-Year Strategic Plan to Address Zambia’s Power Crisis

Amid Zambia’s ongoing power shortages, exceeding 1,300 MW and causing widespread blackouts, the Kafue Gorge Lower Power Development Corporation Limited (KGL), a subsidiary of Zesco Limited, has launched a transformative 10-year strategic plan.

Announced on December 11, 2024, the plan aims to reshape the nation’s energy landscape by addressing the power crisis, promoting sustainable energy, and supporting Zambia’s economic development goals.

KGL’s evolution from a project-focused entity to a fully operational power generation corporation is a critical milestone. Operating a 750 MW hydroelectric power plant, the largest installed capacity among Zambia’s independent power producers, KGL is poised to play a pivotal role in the country’s energy sector.

Speaking on behalf of Acting Board Chair Eng. Justin Loongo, Eng. Wesley Lwiindi outlined the corporation’s forward-thinking philosophy: “KGL does not only anticipate the future; it shapes it.” He emphasized KGL’s commitment to safe, sustainable, and efficient energy, aligning with Zambia’s Vision 2030 of achieving lower-middle-income status.

A cornerstone of the strategic plan is energy diversification. KGL plans to develop a 200 MW solar photovoltaic plant by 2030, reducing reliance on hydroelectric power and mitigating financial risks associated with revenue concentration.

Open access regulations will also allow KGL to expand its power sales beyond current agreements with Zesco, enhancing financial sustainability.

The plan’s implementation comes with a projected cost of USD 2.44 billion, with two-thirds allocated to debt servicing. Despite external debt exceeding USD 900 million, KGL remains optimistic about its financial outlook, forecasting its debt service coverage ratio to improve from under 2x in 2024 to over 4x by 2032.

Notably, KGL has made significant progress in reducing its debt-to-equity ratio, which is expected to close at 0.75 in 2024, down from 1.8 in 2023.

The corporation is collaborating with Zambia’s Ministry of Finance to optimize revenue and minimize the impact of debt obligations.

KGL’s strategic plan incorporates robust risk management measures, including:

• Regular strategy reviews.
• Aligning employee objectives with corporate goals.
• Ongoing discussions with Zesco to ensure payment obligations are met.
• Implementing debt restructuring and foreign exchange hedging strategies to enhance long-term financial stability.

With its ambitious plan, KGL seeks not only to alleviate Zambia’s power crisis but also to position the nation as a leader in sustainable energy development.

By diversifying energy sources, addressing debt challenges, and implementing effective risk management, KGL is laying the groundwork for a resilient and innovative energy sector.