The Copperbelt Energy Corporation (CEC)-the privately owned distributor of power to the copper mines-has announced plans to invest over US$900m in the development of five hydropower stations that would add 800 mw to Zambia's power-generating capacity by 2018. Prior to the CEC's announcement, total installed capacity was set to rise by 64%, from 1,800 mw currently to 2,960 mw in 2017 as the Kafue Gorge Lower and other power projects are implemented (April 2011, Economic policy). The CEC's investments would raise installed capacity by a further 27%, to 3,760 mw by 2018. This means that installed capacity would probably outstrip peak power demand, which is forecast at 3,300 mw in 2018 (assuming that demand for power grows by 10% per year).

If transmission and distribution (T&D) losses were reduced from their current rate of 20.2% to the global average of 8%, the supply of power would exceed demand in 2018. This would allow Zambia to export a sizeable power surplus through the Southern African Power Pool, which connects the power grids of 12 countries in the region. However, this is conditional on the planned power projects being implemented on time, which is far from assured. Furthermore, although T&D losses are likely to fall-as the Energy Regulation Board puts pressure on the state-owned electricity utility, Zesco, to improve efficiency-a goal of 8% will be difficult to achieve. Despite these caveats, the outlook for the power sector is positive. This is underpinned by Zambia's immense hydropower potential, which is estimated at 6,000 mw, and a recent decision by the government to add electricity generation to the list of "priority sectors" that are eligible for generous fiscal incentives (April 2011, Economic policy).