The African Development Bank Group’s Board of Directors has sanctioned an $8 million concessional loan to back the construction of a 25 MW solar photovoltaic power plant in Zambia. The funding, designated for the Ilute Plant, will be drawn from the Sustainable Energy Fund for Africa (SEFA), a multi-donor initiative managed by the Bank. This project aims to boost Zambia’s renewable energy capacity and foster sustainable development.
The development of the Ilute Plant, led by Serengeti Energy Ltd and Western Solar Power Ltd, has faced rising costs due to the COVID-19 pandemic and other economic challenges. Located in Zambia’s Sesheke District, the project was selected by GreenCo Power Services Ltd as a pilot for its energy aggregator model, which operates under the Zambia Electricity Supply Corporation Limited (ZESCO) open grid access framework. In this model, GreenCo will act as an intermediary off-taker, purchasing the plant’s electricity output under a 25-year Power Purchase Agreement and selling it in the Southern African Power Pool Day-Ahead Market.
Speaking on the project’s significance, Dr. Daniel Schroth, the African Development Bank’s Director for Renewable Energy and Energy Efficiency, emphasized the importance of this partnership. “The Ilute Solar PV project is the first to leverage Africa GreenCo as an intermediary off-taker. SEFA’s support has been crucial in bridging the financing gap, paving the way for future projects that contribute to Southern Africa’s energy transition,” he said.
Serengeti Energy CEO Anton-Louis Olivier acknowledged SEFA’s support, highlighting its role in addressing financial challenges caused by the pandemic and rising costs. “The Ilute project is a testament to innovative collaboration and a pioneering model for renewable energy initiatives in Zambia and the broader region,” Olivier said.
The Ilute Plant is expected to play a key role in Zambia’s efforts to expand its renewable energy portfolio and harness its solar energy potential, which is considered vital for enhancing energy access and sustainability in the region.
About SEFA
The Sustainable Energy Fund for Africa (SEFA) is a multi-donor fund established to stimulate private sector investments in renewable energy and energy efficiency across the continent. The fund offers technical assistance and concessional finance to overcome market barriers, strengthen project pipelines, and improve investment risk profiles. SEFA’s goal aligns with achieving universal access to affordable, reliable, and sustainable energy services in Africa, in line with the New Deal on Energy for Africa and Sustainable Development Goal 7.
