INDENI Energy Company Limited, a state-owned enterprise, has made significant strides in enhancing Zambia’s energy security by increasing its contribution to 25 percent of the nation’s total diesel demand. This notable increase in domestic fuel supply represents a vital step towards bolstering the nation’s energy resilience.
Under the current state of INDENI Energy, which has undergone a comprehensive transformation from a traditional oil refinery, INDENI is now dedicated to fuel trading and building a strategic partnership with TAZAMA Pipelines, aimed at achieving sustainable fuel supply.
Speaking in an exclusive interview with the Zambian Business Times – ZBT, at the 59th Zambia International Trade Fair, INDENI Energy Limited, Board Chairperson, Watson Lumba, noted that the company’s remarkable turnaround, involved a challenging but successful restructuring which included a significant redundancy program for former refinery staff, costing over half a billion Kwacha, and the subsequent recruitment and reorientation of personnel towards a commercial business model.
He said through perseverance, INDENI overcame initial setbacks and secured contracts, including a significant partnership with First Quantum Minerals (FQM) to supply low-sulphur diesel.
This partnership not only provided vital liquidity for operations but also positioned INDENI to tap into the growing demand from the mining sector, which is a major consumer of diesel, as the country targets to ramp up copper production to 3 million metric tons per annum by year 2031.
Lumba noted that initially operating without seed capital, INDENI leveraged its human capital, existing equipment, and the strategic advantage of being a state-owned enterprise to secure transactional agreements.
He said a key milestone was gaining access to the converted TAZAMA pipeline, which, along with partnerships with companies like FQM and Vitol Energy, allowed INDENI to increase its supply capacity. Lumba said the company is also in discussions with Saudi Aramco and has an agreement with Abu Dhabi National Oil Company (ADNOC), for supply, further diversifying its sources.
“Currently, INDENI has attained a remarkable achievement by supplying 25% of the national diesel requirement, demonstrating its growth trajectory and commitment to stability.”
He said this strategic shift and organic growth have not only made INDENI self-reliant, operating without government subsidies and consistently paying its workers, but also repositioned it as a key player in Zambia’s energy sector.
“Our key suppliers currently include ADNOC of Abu Dhabi, and we are actively working to establish a partnership with Saudi Aramco and through these strategic alliances, we are able to supply local service station companies, mines, and other industries, such as the Zambia Forestry and Forest Industries Corporation (ZAFFICO) PLC, at competitive wholesale prices. Lumba noted that INDENI is also proactively participating in various national tenders to further expand its market reach. “We are confident in our current trajectory and commend the unwavering commitment of our management team in achieving these milestones.”
Lumba added that with the largest tankage capacity in the country (approximately 156 million liters combined storage capacity), strategic proximity to the TAZAMA pipeline, and a new commercial department, Indeni is well-positioned to continue enhancing Zambia’s fuel security and supporting the nation’s economic growth, especially in critical sectors like mining.
The Board Chair added that INDENI’s current success is driven by a focus on high-volume sales with competitive, albeit, low margins, but good enough for the company to survive, ensuring a stable and affordable supply for the nation.
Lumba said the company has also successfully developed new revenue streams, including laboratory testing services for other OMCs and tank hospitality.
Looking ahead, Lumba said INDENI Energy is exploring the development of its own service stations, particularly targeting underserved communities, with a pilot mobile service station already underway in Kasenseli, Mwinilunga.
He said the company also plans to expand into INDENI lubricants and Liquefied Petroleum Gas (LPG) for cooking.
Meanwhile, INDENI Energy Company Limited, Chief Executive Officer, Evans Mauta, said the company has achieved a stabilized supply and improved its financial position, which looks much cleaner than last year, although it remains close to break-even.
He also reiterated that plans for the future include the integration of retail facilities and entry into the export market within the next two years, adding that INDENI has successfully established support supply services and expanded sales into the mining and wholesale level.
“Currently, INDENI is supplying approximately 35,000 metric tons of cargo monthly and aims to enhance this capacity through improved logistics. Future diversification of supply sources is also being considered to reduce reliance on a single pipeline.”
Mauta added that INDENI recognizes the risks associated with price fluctuations and is preparing to utilize exports as a strategy to offset financial losses when necessary.
He, however, assured that the company will focus on managing exports prudently, ensuring local market needs are prioritized.
