ZAMBIA – Renewable energy trader Africa GreenCo (GreenCo) has raised US$15.5 million from several investors to expand its business.
This financing obtained will mainly allow the development of the activities of its Zambian subsidiary GreenCo Power Services.
The funding is from Denmark’s Developing Countries Investment Fund (IFU), the European Union (EU)-funded Electrification Financing Initiative (EDFI ElectriFi), and InfraCo Africa, a Private Infrastructure Development Group (PIDG) company.
In this East African country, the company created in 2020 jointly by InfraCo Africa and IFU buys renewable energy from independent power producers (IPPs). This electricity is then sold to utility, commercial and industrial (C&I) customers.
GENCO also plans to sell clean energy to competitive markets in the Southern African Power Pool (SAPP).
The fundraising from several investors is intended to provide the company with working capital and a cash buffer to support a 110 MW renewable energy portfolio.
“GreenCo Power Services is the first intermediate power trader in Zambia after the enactment of the 2019 power sector legal framework. GreenCo introduces a creditworthy buyer of renewable energy generated by IPPs into the Zambian electricity market,” said Peter Chibwe Kapala, Zambia’s Minister of Energy.
“GreenCo’s entry into the Zambian electricity market signifies the government’s commitment to creating an enabling environment that will attract private investment in an open, transparent and competitive electricity market.
“This investment will support Zambia’s development of a greener and more diversified energy mix that will create jobs and new employment.”
As part of the development of its activities in Zambia, GreenCo launched a pilot project in March 2021, with a call for tenders for solar power generation in Zambia.
IPPs were invited to bid for power generation from a plant with a capacity of between 10 and 40 MWp. GreenCo finally opted for a 25 MWp solar plant in Sesheke, Western Province.
“Reaching this financial close will enable us to support a portfolio of up to 110MW of renewable energy,” GreenCo’s chief investment officer, Pug Bennet, commented.
“We are now ready to mobilise significant private sector investment in renewable energy whilst strengthening the national and SAPP electricity markets.”
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) since 2018.
GreenCo has awarded its first power purchase agreement tender to a 25MW pilot solar facility in Sesheke in the country’s Western Province. It has also negotiated a power purchase agreement with a large hydro facility to purchase and sell the plant’s excess generation.
“GreenCo is an innovative business that has the potential to increase private investments in renewable energy by acting as a creditworthy intermediary between private producers of renewable energy and offtakers,” said Otto Vinther Christensen, Vice President at IFU.
“To invest in this kind of business is in line with our strategy to support the green transition in developing countries and improve access to electricity. Therefore, we are pleased to follow up on our 2020 investment in Africa GreenCo and join efforts with the company as well as our co-investors InfraCo Africa and EDFI ElectriFI.”
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