AfDB approves $8m for solar plant development in Zambia

The African Development Bank Group (AfDB) has approved an $8 million concessional loan to facilitate the construction of a 25MW Solar Photovoltaic (PV) power plant in Zambia.

This funding will be sourced from the Sustainable Energy Fund for Africa (SEFA), a multi-donor special fund managed by the bank.

“We are delighted to support the Ilute Solar PV project – which will be the first project to use Africa GreenCo as an intermediate off-taker,” AfDB director responsible for renewable energy and energy efficiency projects Daniel Schroth said.

“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.”

The Ilute Solar Plant, located in Zambia’s Sesheke District, aims to enhance the country’s sustainable development and unlock its significant renewable energy potential.

The project has encountered rising costs due to challenges brought on by the COVID-19 pandemic, but the AfDB’s financial support is expected to help mitigate these obstacles.

Serengeti Energy Ltd and Western Solar Power Ltd are spearheading the plant’s development.

The project has been competitively selected by GreenCo Power Services Ltd, which will serve as an intermediary off-taker under the Zambia Electricity Supply Corporation Limited (ZESCO) open grid access framework.

GreenCo will purchase the electricity generated by the plant through a 25-year power purchase agreement and subsequently sell it to the Southern African Power Pool’s Day-Ahead Market.

Serengeti Energy chief executive Anton-Louis Olivier expressed gratitude for SEFA’s support, noting that it will propel the Ilute project forward.

“This loan addresses the financial challenges we’ve faced due to the pandemic and rising costs. The Ilute project is a testament to innovative collaboration and serves as a pioneering model for future renewable energy initiatives in Zambia and the wider region.”

Serengeti Energy is an independent power producer specialising in the development, construction and operation of utility-scale renewable energy plants tailored to the needs of both public and private off-takers.

JN/APA