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The project encountered increased expenditures thanks to the COVID-19 pandemic
Zambia will receive a $8 million concessional loan to help build a 25MW solar photovoltaic power plant.
This comes after the African Development Bank Group’s (AfDB) Board of Directors approved the loan to support the construction of the power plant.
According to the AfDB, the financing for the Ilute Solar Plant will come from the Sustainable Energy Fund for Africa (SEFA), a multi-donor Special Fund maintained by the Bank.
The AfDB said the project has encountered increased expenditures because of the COVID-19 pandemic, among other obstacles.
Spearheading the project are Serengeti Energy and Western Solar Power , while GreenCo Power (GreenCo) Services will act as an intermediary off-taker, purchasing the generated electricity under a 25-year Power Purchase Agreement and selling it to the Southern African Power Pool Day-Ahead Market.
African Development Bank Director for Renewable Energy and Energy Efficiency, Dr Daniel Schroth, said they are “delighted to support the Ilute Solar PV project, which will be the first project to use Africa GreenCo as an intermediate off-taker.”
“SEFA’s support has been instrumental in bridging the financing gap and will pave the way for future projects that contribute to Southern Africa’s energy transition,” he said.
Zambia’s solar project marks a key step in country’s search for energy security
Think tank African Energy Council (AEC) said this project marks a key step in this shift, aimed at reducing vulnerability during droughts while sustainably expanding the country’s electric capacity.
“With a total funding of $45 million, including $8 million from SEFA and $37 million from private capital, Ilute showcases a funding model that avoids sovereign guarantees. This financing approach could encourage other similar projects by attracting independent investors interested in the potential of renewable energy in Southern Africa,” they stated.
According to AEC, the project joins Zambia’s existing solar parks, Bangweulu (54MW) and Ngonye (34MW), all of which have been operational since 2019, as well as a 200MW solar plant currently under development in Serenje.
These projects collectively meet a fraction of Zambia’s energy needs, highlighting the continued need for new installations to maintain long-term energy security.
The project is connected to the Southern African Power Pool (SAPP), allowing it to sell excess electricity to other regional countries. This connectivity increases the project’s profitability while also encouraging energy cooperation between Zambia and other countries.
AEC said although its immediate impact is restricted to a 25MW capacity, this project is a step towards eventual diversification of the country’s energy mix. |
