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InfraCo Africa, the Danish Investment Fund for Developing Countries (IFU) and EU-funded Electrification Financing Initiative (EDFI ElectriFI) will finance Africa GreenCo to the tune of $15.5million to enable it to scale its offering as Zambia’s first renewable energy buyer and service provider.
Africa GreenCo aims to increase private sector investment in energy generation in sub-Saharan Africa by mitigating the credit risks associated with the current lack of creditworthy offtakers.
GreenCo’s Lusaka-based company GreenCo Power Services was established in 2020 with support from IFU and InfraCo Africa (through its sister company, PIDG Technical Assistance). GreenCo’s model involves purchasing power from renewable independent power producers (IPPs) and selling that electricity to utilities, private sector offtakers (such as commercial and industrial users) and competitive markets in the Southern African Power Pool (SAPP).
The $15.5million raised by the second fundraising will provide GreenCo with working capital and the Liquidity Buffer necessary to support a portfolio of up to 110MW of renewable energy.
Pug Bennet, GreenCo’s Chief Investment Officer, said they are grateful to their investors and partners ZESCO, the South African Power Pool, existing SAPP members and the Zambian government for the trust and support of a new business model. “We are now ready to mobilise significant private sector investment in renewable energy whilst strengthening the national and SAPP electricity markets,” said Bennet.
Renewable energy investor GreenCo is first SAPP member in more than four years
In its first 12 months of operation, GreenCo has been accepted as the first member under the Market Participant category and the first new member of the Southern African Power Pool (SAPP) since3 2018. GreenCo has awarded its first power purchase agreement (PPA) tender to a 25MW pilot solar facility in Sesheke in Zambia’s Western Province. It has also negotiated a PPA with a large hydro facility to purchase and sell the plant’s excess generation power.
Zambian Minister of Energy Peter Chibwe Kapala said GreenCo has introduced a creditworthy buyer of renewable energy generated from IPPS to the Zambian electricity market. “The entry of GreenCo on the Zambian electricity market signifies Government’s commitment to create a conducive environment that will attract private investments in an open, transparent and competitive electricity market. This investment will support Zambia’s development of a greener and diversified energy mix: one that creates jobs and new business opportunities, whilst at the same time positioning Zambia as the region’s power trading hub,” said the Zambian Energy Minister.
Claire Jarratt, InfraCo Africa’s Chief Investment Officer, explained they are trying to both increase the attractiveness of Zambia’s renewable energy sector to private investors and to complement wider efforts to incorporate more clean energy into the country’s energy mix by reducing reliance on sovereign financial support to bring new generation capacity online.