Zambia turns to carbon markets to unlock private capital for a resilient renewable energy future

…the partnership with Norway seeks to generate 300 megawatts of green energy

January 28, 2026 – Lusaka

Zambia is repositioning its energy transition strategy by using international carbon markets as a catalyst to unlock private investment, following the signing of a Mitigation Outcome Purchase Agreement (MOPA) with the Norwegian Ministry of Climate Change and Environment under Article 6 of the Paris Agreement.

The agreement, signed through the Ministry of Green Economy and Environment, establishes a results-based financing framework that links verified emission reductions to new renewable electricity delivered to Zambia’s national grid.

Rather than focusing only on expanding generation capacity, the initiative places emphasis on making renewable energy projects more bankable by creating predictable carbon revenue streams for developers.

At the centre of the cooperation is the Carbon Feed-In Premium (CFIP) Programme, a sector-wide financing instrument designed to complement traditional power purchase agreements and reduce investment risk.

Zambia’s energy sector has historically been dominated by hydropower, which accounted for more than 80 percent of installed capacity as of 2024.

Recurring droughts, however, have exposed the vulnerability of this dependence, triggering load-shedding and increasing the use of coal and diesel generation.

Government sees carbon-backed financing as a strategic lever to accelerate diversification into solar and other renewable technologies while strengthening long-term energy security.

The MOPA builds on the bilateral Article 6 cooperation agreement Zambia and Norway signed at COP29 in Baku, Azerbaijan, which allows both countries to engage in international carbon trading.

Under the new arrangement, Zambia will receive performance-based payments for verified greenhouse gas emission reductions associated with renewable electricity production.

These payments are expected to lower financing costs and improve project viability, particularly for independent power producers.

Speaking on behalf of the Ministry of Energy Permanent Secretary-Electricity, Director of Planning Mr. Sineva Kambenja described the programme as a strategic investment in infrastructure, industrial development and human capital.

He said government anticipates a rise in renewable energy projects as a direct result of the programme.

Minister of Green Economy and Environment Mike Mposha said the agreement signals Zambia’s readiness to move from policy commitments to implementation.

“This agreement supports Zambia’s efforts to attract investment in clean and reliable power. By linking finance to verified results, we can accelerate renewable energy delivery that strengthens our energy security and advances our climate goals,” Mr. Mposha said.

Norway’s Minister of Climate and Environment Andreas Bjelland Eriksen noted that the partnership demonstrates how Article 6 can mobilise large-scale private capital while maintaining high standards of transparency and integrity.

He said Norway is pleased to deepen cooperation with Zambia to support measurable emission reductions and clean energy investment.

The cooperation is supported by the Norwegian Global Emission Reduction (NOGER) Initiative and the Norwegian Article 6 Climate Action (NACA) Fund, hosted under the Global Green Growth Institute’s Carbon Transition Facility.

The facility provides an end-to-end pathway that helps countries move from Article 6 readiness to real-world project delivery.

Zambia’s participation in carbon markets has been underpinned by years of technical preparation, including support from the Supporting Preparedness for Article 6 Cooperation (SPAR6C) programme.

Through SPAR6C, Zambia developed a national Carbon Market Framework and conducted detailed analysis in 2025 to define emission factors for the power sector.

These technical foundations are critical for ensuring credible accounting and robust results-based payments.

Following the signing of the MOPA, Zambia, Norway, GGGI and a multi-institutional working group will finalise implementation arrangements.

The working group includes the Ministry of Green Economy and Environment, Ministry of Energy, Office for Promoting Private Power Investment, Energy Regulation Board, Industrial Development Corporation, ZESCO and Zanaco.

Engagement with carbon project developers in the renewable energy sector is scheduled to begin on 1 April 2026.

The objective is to select projects capable of delivering high-integrity emission reductions while expanding clean power supply to the national grid.
Zambia National Commercial Bank (Zanaco) will play a central financial role in the programme.

Acting Managing Director Mr. Kalengo Sumukoko said Zanaco is honoured to serve as aggregator and seller of internationally transferred mitigation outcomes on behalf of government and project developers.

He said the bank will also act as fund manager and financial trustee for the Carbon Feed-In Premium, executing financial transactions and making timely results-based payments once projects are validated by the Energy Regulation Board.

Mr. Sumukoko added that Zanaco intends to support upfront financing of mitigation activities, recognising that early-stage capital is essential to unlock new renewable projects.

He described the initiative as a milestone in Zambia’s journey toward a cleaner and more resilient energy future.
Beyond power generation, government expects the programme to stimulate local value chains, skills development and job creation within the renewable energy sector.

The use of carbon markets is also seen as positioning Zambia as an emerging hub for high-integrity mitigation projects in Africa.

Officials say the MOPA demonstrates how climate finance can be structured to deliver both environmental and economic benefits.

By combining strong policy direction, regulatory reforms and international partnerships, Zambia is seeking to turn climate ambition into investable opportunities.

As global demand for credible carbon credits grows, Zambia aims to be among countries that supply high-quality mitigation outcomes while advancing domestic development.

The Zambia–Norway cooperation therefore represents more than a single agreement.

It signals a broader shift toward innovative financing models that place private capital at the centre of the country’s renewable energy transition.