It is December 16 and Africa’s second largest copper hotspot Zambia has received fairly scanty precipitation in most parts breeding fears of drought. Ideally the rainfall season should commence mid October and start to intensify into December all the way upto March the following year. Climate risks are becoming more eminent and a reality as the effects continue to dent the business ecosystem through arid weather.
The meteorological authorities under the green and environment ministry forecast commencement of rain from December 17 for the next 10 days however the distribution skew continues to generate food security fears. Farmers have been advised to be mindful of planting patterns especially with a skew towards early maturing crops to match the short rainfall season forecasted.
As for energy generation the Kariba dam, Zambia’s proxy source for electricity production has its levels at 19.3% compared to 21.4% a year ago today flagging power risks. Much as other renewable sources are available to hedge against concentration to hydro generation capacity, solar production has limitations in quantum generated.
Rainfall patterns have adversely changed and evolved over the last decade causing an array of hurdles ranging from energy generation bottlenecks from receding dam levels to waning crop yields. However Zambia remains fortunate because despite acute droughts in the region, harvests remain bumper. Climate action has seen increased attention from various players such as the World Wide Fund for Nature (WWF) aligned to the global United Nations Sustainable Development Goals 2030 which has seen Zambia in attendance at key world summits such as the United Nations General Assembly and the most recent COP27 Climate Conference.
The banking sector has been elastic to climate risks aligned to risk appetite with some landmark agreements such as the $60milion SME Climate fund that the likes of Zanaco Plc managed by Kukula Capital have rolled out.
Other banks that continue to demonstrate alignment with the climate risk resilience agenda include Zambia Industrial Commercial Bank (ZICB) which recently in conjunction with Prospero disbursed it’s first climate funds circa GBP255,000 to three businesses driving a green agenda.
The Kwacha Arbitrageur
