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HomeBusiness$27m renewable energy project for Western Province

$27m renewable energy project for Western Province

By DERRICK SILIMINA

GreenCo recently signed a $27 million Guarantee Facility with GuarantCo, part of the Private Infrastructure Development Group (PIDG) to boost renewable energy at its first offtake – the Ilute Project in Western Province.

Africa GreenCo (GreenCo), a renewable energy buyer and trader operating in Southern Africa (Zambia, South Africa, Zimbabwe and Namibia) purchases power from renewable energy generators and sells that electricity to utilities, private sector off-takers, national power trading markets and to the competitive markets of the Southern African Power Pool (SAPP).

In a statement, GreenCo’s Chief Investment Officer Pug Bennet said under this Guarantee Facility, GuarantCo would issue guarantees in favour of the Independent Power Projects (IPPs) from whom GreenCo would buy power, backing GreenCo’s payment obligations to such IPPs.

“GuarantCo’s backing enhances GreenCo’s credibility in the market. The work done by GreenCo as the leading energy trader in the region is only possible with the support of our investors, IFU and InfraCo Africa, and we are grateful to GuarantCo for adding to this support through this Guarantee Facility,” Bennet said.

Energy experts say the lack of creditworthy off-takers to long-term power purchase agreements has been a significant impediment to effectively harnessing the enormous renewable energy potential of Southern Africa.

Given GuarantCo’s strong credit rating (Moody’s A1 and Fitch AA-), this provides significant comfort to such IPPs, and their lenders, increasing bankability and helping to attract investment in new renewable energy generation in Southern Africa. The Guarantee Facility provides for the ability to be increased to $50 million to support the further growth of the business.

Layth Al-Falaki, CEO at GuarantCo, said: “We are very happy to provide a complimentary and innovative credit solution to support the company to further grow its business and provide financial support to solar photovoltaic projects in Southern Africa.”

It is evident that the current drought is a wake-up call for energy sector players to work together to meet the power demand and solar energy is timely and significant in the promotion of alternative energy as it will help cushion the power deficit in the country.

For this reason, President Hakainde Hichilema has since commissioned the 60-megawatt Copperbelt Energy Corporation (CEC) Itimpi Solar Plant built at a cost of over $53 million.

President Hichilema said the current effects of Climate change have called for diversification of the energy sector adding that his Government was focused on improving the economy and requires more energy to run various sectors.

“The commissioning of this power plant is particularly timely, as our country and the surrounding region grapple with a severe power shortage that threatens energy and food security, and ultimately, national security.”

The Head of State stressed that investing in alternative energy sources beyond hydroelectric power, which has been severely impacted by El Niño, was a commendable initiative.

With a ready market for all stakeholders in the energy sector, President Hichilema encouraged CEC and other potential investors to pursue their exponential expansion, emphasizing the ample opportunities available in this vital industry. “We urge potential investors in this sector to collaborate and support each other, rather than engaging in unnecessary rivalry that hampers the growth of the industry and undermines our economic agenda.”

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