The African Development Bank has approved an $8 million loan to build a 25MW solar PV power plant in Zambia to advance the country’s sustainable energy goals. The Ilute Solar PV Power Plant will improve Zambia’s energy access, create jobs, and reduce its reliance on fossil fuels.
AfDB Funds 25MW Solar PV Power Plant
In a significant move toward sustainable energy, the African Development Bank Group (AfDB) has approved an $8 million concessional loan for a 25MW photovoltaic (PV) power plant in Zambia. Known as the Ilute Solar Plant, the project will be developed in Zambia’s Sesheke District, marking a key shift in the country’s energy landscape.
Daniel Schroth, the AfDB’s director for renewable energy and energy efficiency, welcomed 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 project’s financing gap, noting that the funding will be crucial to Southern Africa’s transition to renewable energy and will set a standard for similar projects in the region.
The Ilute Solar PV power plant is expected to bolster Zambia’s sustainable development and unlock its vast renewable energy potential. The project will help reduce the country’s dependence on fossil fuels and, in turn, decrease greenhouse gas emissions. As Zambia’s power needs have grown, initiatives like the Ilute plant are essential to meeting this demand sustainably.
Rising Costs and Challenges Due to the Pandemic
The path to developing the Ilute Solar PV power plant has not been without obstacles. The project has been affected by rising costs and logistical challenges, primarily due to the COVID-19 pandemic and its disruption of global supply chains. This financial intervention from the AfDB is a crucial lifeline to bring the project back on track.
Serengeti Energy Ltd and Western Solar Power Ltd, the project’s key developers, are set to lead construction and ensure its success. Both companies specialize in renewable energy solutions and have extensive experience implementing sustainable energy initiatives across Africa.
A key innovation in 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 power generated to be sold to a broader market. The deal will enable GreenCo to subsequently sell the 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, expressed his appreciation for SEFA’s support and highlighted the funding’s importance 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 Ilute Solar PV Power Plant underscores the African Development Bank’s dedication to promoting sustainable energy and tackling energy poverty on the continent. With backing from SEFA, such projects make renewable energy more accessible to African countries by providing the financial support needed to overcome economic and logistical challenges.
This $8 million concessional loan for the Ilute Solar PV Power Plant in Zambia is a landmark investment that highlights the AfDB’s commitment to fostering renewable energy development in Africa. As construction begins, the Ilute project is poised to serve as a model for future renewable energy initiatives across the region, advancing the vision of a sustainable and green continent.
