The Ngwenya Solar Project, led by Emerging Africa Infrastructure Fund (EAIF), secured a $30 million loan to finance a 100 MWp solar power plant in Zambia. This project, located 40 km west of Lusaka, will play a crucial role in addressing Zambia’s power shortages and advancing the country’s renewable energy agenda.
Largest Solar Project in Zambia Backed by Solar Project Financing
The Ngwenya Solar Project has reached a major milestone with a $30 million loan from Emerging Africa Infrastructure Fund (EAIF), an investment organization that is part of the Private Infrastructure Development Group (PIDG). This funding will support the development of a 100 MWp solar power plant in Zambia, marking a significant step forward in the country’s renewable energy efforts. The project is being developed by a consortium led by Globeleq, a leading investor and operator in the African power sector.
The Ngwenya Solar Project will be located approximately 40 kilometers west of Lusaka, the Zambian capital. It is expected to become the largest solar power plant in the country, providing clean and reliable electricity to the national grid. This project aligns with Zambia’s goal of reducing its dependence on hydroelectric power, which currently accounts for the majority of the country’s energy supply.
Solar Project Financing and Support for the Ngwenya Development
The EAIF’s $30 million loan is a critical component of the project’s financing. The loan is part of a larger financial package that includes funding from the International Finance Corporation (IFC), a member of the World Bank Group, and the Industrial Development Corporation of South Africa (IDC). The total cost of the project is estimated at $100 million.
In addition to the loan, the Ngwenya Solar Project has received support from the Global Energy Transfer Feed-in Tariffs (GET FiT) program, which is managed by the German development bank, KfW. This program provides financial incentives to renewable energy projects in Zambia, helping to make them more economically viable.
The project is also benefiting from a long-term power purchase agreement (PPA) with ZESCO, Zambia’s state-owned electricity utility. Under the PPA, ZESCO will purchase electricity from the Ngwenya Solar Plant at a fixed price for 25 years. This agreement provides financial stability for the project and ensures that the electricity generated will be fully utilized.
Construction and Impact Driven by Solar Project Financing
Construction of the Ngwenya Solar Plant is expected to begin later this year, with the project scheduled to be completed by 2025. Once operational, the plant will generate enough electricity to power approximately 40,000 homes in Zambia. It will also help reduce the country’s reliance on hydroelectric power, which has been affected by droughts in recent years.
The Ngwenya Solar Project is expected to have a positive impact on Zambia’s economy. It will create jobs during the construction phase and provide ongoing employment opportunities once the plant is operational. The project will also help diversify Zambia’s energy mix, making the country’s electricity supply more resilient to climate change.
In addition to its economic benefits, the project will contribute to Zambia’s efforts to reduce greenhouse gas emissions. By replacing fossil fuel-based electricity with solar power, the Ngwenya Solar Plant will help lower the country’s carbon footprint.
Advancing Renewable Energy in Zambia Through Solar Project Financing
The Ngwenya Solar Project is a significant milestone for Zambia’s renewable energy sector. It demonstrates the potential of solar power to address the country’s energy challenges and support its economic development.
The project is also a testament to the importance of international collaboration in financing and developing renewable energy projects in Africa. By bringing together financial institutions, development agencies, and private sector partners, the Ngwenya Solar Project is helping to pave the way for more renewable energy projects in Zambia and across the continent.
The success of the Ngwenya Solar Project could serve as a model for other countries in the region that are looking to expand their renewable energy capacity. With the right support and financing, solar power can play a crucial role in meeting Africa’s growing energy needs while reducing its reliance on fossil fuels.
