Zambia’s Africa GreenCo (GreenCo), has secured $15.5m in funding with participation from InfraCo Africa, the Danish Investment Fund for Developing Countries (IFU) and the EU-funded Electrification Financing Initiative (EDFI ElectriFi).
GreenCo’s Chief Investment Officer, Pug Bennet, said “Reaching this financial close will
enable us to support a portfolio of up to 110MW of renewable energy. We are extremely
grateful to our investors and our partners from the Government of Zambia, ZESCO, the SAPP
team and the existing SAPP members for their trust and support of innovative new business
models such as GreenCo and look forward to working alongside the industry leaders as the
market grows from strength to strength. We are now ready to mobilise significant private
sector investment in renewable energy whilst strengthening the national and SAPP
electricity markets.”
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 off-takers (i.e. commercial and
industrial users) and competitive markets in the Southern African Power Pool (SAPP). The
monies raised by the second fundraising announced today will provide GreenCo with working
capital and the Liquidity Buffer necessary to support a portfolio of up to 110MW of renewable
energy.
The Zambian Minister of Energy Hon. Peter Chibwe Kapala, MP, welcomed this investment
saying, “GreenCo Power Services Limited is the first Intermediary Power Trader in Zambia
following the enactment of the 2019 energy sector legal framework. GreenCo introduces to
the Zambian electricity market a creditworthy buyer of renewable energy generated from
IPPs. The entry of GreenCo into 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.”
InfraCo Africa’s Chief Investment Officer, Claire Jarratt said, “PIDG and InfraCo Africa are
pleased to be investing alongside IFU and EDFI ElectriFI to grow the potential of GreenCo’s
innovative approach. With strong support from the Government of Zambia and national
utility, ZESCO, GreenCo aims 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 that new generation capacity online.”
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. 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,” said
Otto Vinther Christensen, Vice President at IFU.
“EDFI ElectriFI is delighted to join forces with IFU and InfraCo Africa to support GreenCo in
the realisation of its initial portfolio of PPA with renewable IPPs. This catalytic investment
is made through our Country Window dedicated to Zambia and will enable the emergence
of a creditworthy private offtaker, allowing for the deployment of additional renewable
generation capacity in the country. The support of the Government of Zambia has been key
to the development of this unique initiative,” explained Quentin De Hoe, ElectriFI Senior
Investment Officer at EDFI Management Company.
Alongside conventional renewable energy IPPs, GreenCo offers a complementary approach
to scaling up renewable energy investment in Zambia, helping to mitigate climate change
impacts, improve the security of electricity supply, and increase efficiency in the country’s power sector. As members of the SAPP and with access to additional funding, the company is well-positioned to demonstrate the potential of its model to transform the region’s wider
renewable energy landscape.
