Lusaka, 05 October 2023 – “Zambia and the Democratic Republic of Congo (DRC), together are home to at least 70 percent of critical minerals required to produce Battery Electric Vehicle (BEV) and precursors. The Joint Initiative is expected to unlock economic potential and strengthen the value chain in the both countries. This Workshop has been organised to galvanise support and outline opportunities for local and foreign entrepreneurs to actively participate in the BEV Initiative” said Hon Elias Mubanga, MP, Acting Minister of Commerce, Trade and Industry”.
The Minister was speaking at a Workshop on the theme, “Needs and Financing Mechanisms of the Special Economic Zone (SEZ) for the Battery Electric Vehicle value chain in the Republic of Zambia” organised by the Ministry of Commerce, Trade and Industry (MCTI) in collaboration with the Economic Commission for Africa (ECA) with the support of Africa Export-Import Bank (Afreximbank). He said for the initiative to succeed the Workshop needed to address the critical issues of access to finance, access to raw materials, access to opportunities for local stakeholders and to form strategic partnerships and draw lessons from those that have developed successful BEV Value Chains.
The main objective of the consultations was to provide the Zambian private sector and entrepreneurs, the Zambian financial sector, development partners, institutional investors, negotiators, academicians, with the prospect to discuss and identify the opportunities for the active participation on specific nodes of the battery value chain. The identification and exploitation of the various local content opportunities will help deepen the domestic footprint of the value chain in Zambia and ensure that linkages are developed and strengthened as the value chain evolves.
Mr. John Mulongoti, Permanent Secretary-Investments and Industrialisation, MCTI, in his opening remarks shared Zambia’s resolve to create a competitive Electric Vehicle Battery value chain leveraging on the presence of the critical minerals, tailored towards sustainable development and inclusive growth. He emphasised the need to outline opportunities available for the participation of local and international stakeholders along the Battery Value Chain for the successful implementation of the Initiative. Mr. Mulongoti stated that Zambia has the legal framework in place to support the establishment of a SEZ focusing on the BEV value chain.
Ms. Eunice Kamwendo, Director, ECA Sub-regional Office for Southern Africa (SRO-SA) in her welcoming remarks informed participants that the consultation will enhance understanding of BEV in Zambia and accelerate the exploitation of opportunities for mineral-based transformation in Zambia and in other countries on the continent. She added that the continent is well positioned to benefit from its mineral resources as the world transitions to net zero emissions. “It is estimated that the electric battery vehicle market will grow to a value of US$8.8 trillion by 2025, and US$46 trillion by 2052, an almost six-fold increase in market value over the next 25 years. According to the Bloomberg report, it would cost only one third to build a 10,000-ton precursor facility in the DRC compared to the United States, and roughly half as much as in China. Moreover, situating the facility in the DRC would be a much greener option, given the proximity to raw minerals resources and access to hydroelectric power”.
The official remarks were followed by an overview on the DRC-Zambia initiative and framework for the green sector presented by Mr. Trust Mufune, Chief Economist, MCTI. He provided a roadmap on the initiative thus far; from 24th to 25th November, 2021, His Excellency, Mr. Antoine Tshisekedi Tshilombo, President of DRC hosted a multi-stakeholder (DRC – Africa) Business Forum to foster robust debate on the renewable energy market; on 29th April, 2022, the Governments of the Republic of Zambia and the DRC, supported by ECA and Afreximbank entered into a Cooperation Agreement for the establishment of the BEV value chain and the clean energy sector; and on 27th March, 2023 both parties signed an agreement on the establishment of SEZs dedicated to the production of battery precursors, batteries and electric vehicles. He indicated that this is feasible as Africa holds significant reserves of strategic battery minerals such as cobalt, lithium, manganese, graphite, nickel and copper which could support the emergence of a regional value chain. Mr. Mufune also highlighted the goals the EVB initiative aimed to achieve, the opportunities it presents and areas of collaboration among stakeholders. He emphasised the need for Africa to move up the EVB value chain.
The MCTI insights were followed by a presentation on support to the implementation of the DRC-Zambia BEV initiative by Mr. Jean-Luc Mastaki Namegabe, Director, ECA Sub-regional Office for Central Africa (SRO-CA), who said innovative financing options are needed to support the participation of Zambians and Congolese along the BEV value chain. Innovations in this endeavour include establishment of a Special Purpose Vehicle to enable ordinary citizens to invest in the value chain. Furthermore, he alluded to the use of business-to-business enabled development finance institutions and carbon credit market facility to mobilize financing. Mr. Mastaki highlighted that SRO-CA organised a similar dialogue with the Congolese banking sector to mobilise national savings to finance the BEV initiative.
The second session focused on opportunities and challenges for Zambian stakeholders within the clean energy sector. This included a presentation by Prof. Imasiku Nyambe, University of Zambia, School of Mines focused on the battery minerals resource base in Zambia and in Southern Africa and by Mr. Sokwani Chilembo CEO, Zambia Chamber of Mines on specific opportunities for stakeholders. ARISE Integrated Industrial Platform presented the preliminary findings and recommendations from the pre-feasibility study on the SEZ.
The second day discussed financing options and instruments and included interventions by Afreximbank, African Development Bank (AfDB), the Bankers Association of Zambia and the Bank of Zambia. Dr. Oswald Mungule, Senior Analyst, Research and Regulation Policy outlined the role of the Central Bank in anchoring financing of the BEV value chain by putting in place green loans guidelines and developing a framework on transparency and accountability. The participants called on the local finance institutions to develop appropriate mechanisms for artisanal and small-scale miners leveraging domestic sources of finance including pension funds. The Ministry of Mines and Mining Development, Zambia Development Agency and the Industrial Development Corporation underscored the role of government in nurturing the growth of the sector.
Presentations by the University of Zambia, the Ministry of Technology and Science, the National Institute for Scientific and Industrial Research and the Ministry of Small and Medium Enterprise Development emphasized the importance of skills development and technology transfer. The experience shared by Dr. Sixtus Mulenga, CEO, Musamu Resources Limited, a manganese miner, outlined the challenges and opportunities for Zambian investors emphasizing the significance of defining the mineral resource base to facilitate investment. He also stressed the need of integrating mining with agriculture as a mechanism for contributing to the long term sustainable economic development of Zambia.
The final and closing session spoke to sustainability of the sector including environmental, social, governance and circular economy. Best practices were shared by the Ministry of Mines and Minerals Development; by Zambian Electric Mobility Innovation Alliance and Zambia Environmental Management Agency.
The participants concurred that this initiative is opportune in the wake of global transition dynamics towards a decarbonized world and renewable energy, which require transformational shifts in various aspects related to the sustainable management of natural resources. Once operationalised, the initiative will lead to job creation, economic growth and structural transformation, sustainable resource management, environmental protection, technology transfer, infrastructure development and knowledge exchange. In closing the workshop, Mr. John Mulongoti, Permanent Secretary responsible for Investments and Industrialisation, MCTI, commended ECA and Afreximbank and other partners for the support. He reaffirmed the government of Zambia’s commitment to the implementation of the Initiative noting that more local value addition, more citizens participating in economic activities related to the BEV value chain and increased diversification of the economy will, lead to socio-economic transformation.
Issued by:
The Sub-Regional Office for Southern Africa
UN Economic Commission for Africa (ECA)
P.O. Box 30647, Lusaka, Zambia.
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