The African Development Bank has approved an $8 million loan to build a 25MW solar PV power plant in Zambia, aiming to advance the country’s sustainable energy goals. The Ilute Solar PV Power Plant will enhance Zambia's energy access, create jobs, and reduce reliance on fossil fuels.
AfDB Funds 25MW Solar PV Power Plant
In a significant step toward sustainable energy, the African Development Bank Group (AfDB) has approved an $8 million concessional loan for a 25MW Solar Photovoltaic (PV) power plant in Zambia. This Solar PV power plant project — called the Ilute Solar Plant — will be developed in Zambia’s Sesheke District, marking an essential shift in the country’s energy landscape.
Daniel Schroth, AfDB's director responsible for renewable energy and energy efficiency projects, expressed his excitement over the bank’s involvement in the Ilute project. “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,” Schroth said.
He also emphasized SEFA's critical role in bridging the financing gap for the project. According to Schroth, the funding will play a crucial role in Southern Africa’s transition to renewable energy, setting a standard for similar projects in the region.
The Ilute Solar PV power plant is expected to bolster Zambia’s sustainable development and unlock vast renewable energy potential. The project will help reduce the country's dependence on traditional fossil fuels and, in turn, decrease greenhouse gas emissions. Zambia's power needs have grown, and initiatives like the Ilute Solar PV plant are essential to meet this demand sustainably.
Rising Costs and Challenges Due to the Pandemic
The path to establishing the Ilute Solar PV power plant has not been without obstacles. Rising costs and logistical challenges have affected the project, primarily due to the COVID-19 pandemic, which disrupted supply chains globally. AfDB’s financial intervention is thus seen as a lifeline to bring the project back on track.
Serengeti Energy Ltd and Western Solar Power Ltd, key players in the development of this solar PV power plant, are set to lead construction and ensure the project's success. Both companies specialize in renewable energy solutions and have extensive experience in implementing sustainable energy initiatives across Africa.
Renewable Energy
An innovative aspect of this project is its collaboration with GreenCo Power Services Ltd, which has been competitively selected to serve as an intermediary off-taker. GreenCo will purchase the electricity produced by the solar PV power plant through a 25-year power purchase agreement.
This agreement is structured under the Zambia Electricity Supply Corporation’s open grid access framework, allowing the electricity generated by the Ilute Solar PV power plant to be sold to a broader market. This deal will allow GreenCo to subsequently sell the generated electricity to the Southern African Power Pool’s Day-Ahead Market.
Serengeti Energy’s Role and Commitment to Renewable Energy
Serengeti Energy Ltd — an independent power producer specializing in utility-scale renewable energy — is co-leading the project with Western Solar Power Ltd. Anton-Louis Olivier, Serengeti Energy’s CEO, conveyed his appreciation for SEFA’s support and highlighted the importance of the funding to the project's progression.
“This loan addresses the financial challenges we’ve faced due to the pandemic and rising costs,” Olivier said. “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.”
The development of the Ilute Solar PV Power Plant demonstrates the African Development Bank’s dedication to promoting sustainable energy and tackling energy poverty on the continent. With the backing of SEFA, projects like Ilute are making renewable energy more accessible to African countries, providing financial support to overcome economic and logistical challenges.
The $8 million concessional loan for the Ilute Solar PV Power Plant in Zambia is a landmark move that highlights AfDB's commitment to fostering renewable energy development in Africa. As construction begins, the Ilute project will serve as a model for future renewable energy projects across the region, advancing the vision of a sustainable and green Africa.