Three firms agree on Power Purchase Agreement for Zambia’s solar project

Three firms have signed a Power Purchase Agreement (PPA) at this year’s COP 28 in Dubai for the Ilute Solar PV Project based in Zambia.

The three firms are Africa Greenco Group, Serengeti Energy and Western Solar Power, according to a statement issued on Saturday.

Ilute Solar had been developed by Western Solar Power, a Zambian Renewable Energy Developer, and Serengeti Energy, an African Renewable Energy IPP owned by KfW, STOA, Proparco, Norfund, Swedfund and NDF.

Leveraging the competitive markets of the Southern African Power Pool (SAPP), the project adopted an innovative private sector and market based approach to mitigate customer default risk.

“Unlike the conventional practice of transferring project risk to the government, Ilute Solar will use the vast markets available through SAPP to secure project financing without the need for sovereign guarantees,” according to the statement.

With a substantial direct foreign investment of US$37 million, Ilute is reported to have introduced distinctive financing structures aimed at diversifying Zambia’s energy sources.

“Beyond contributing to the national energy grid, the project was designed to stimulate local economic growth by creating employment opportunities during its construction phase and focusing on community involvement and skill development.

“The ground-breaking project will serve as a testament to the practicality and success of an open access regime within the Zambian Electricity Supply Industry (ESI), aligning with the legislative amendments of 2019 and will open up new avenues for financing renewable energy projects in Africa,” the statement indicated.

GreenCo’s involvement in the project highlighted its dedication to sustainability by agreeing to purchase power generated by the Ilute solar PV project.

Additionally, the project reflected Zambia’s commitment to sustainable energy solutions, a significant move in Africa’s renewable energy progress and underscores SAPP’s role in enabling renewable energy integration into the region.

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