Zambia: Africa GreenCo
Promoting an innovative approach to financing renewable energy
Climate vulnerability, coupled with a steadily rising demand for power, has made increasing Zambia’s installed generation capacity a long term national priority. The Government of Zambia has proactively sought to open up the country’s power sector to private investment and has highlighted the importance of increasing renewable energy in Zambia’s energy mix through its National Energy Policy 2019. However, the limited appetite of commercial financing for renewable energy independent power producers (IPPs) has, to date, limited the project pipeline and impeded the government’s ambition for growth in the renewable energy sector.
Africa GreenCo’s Lusaka-based company, GreenCo Power Services (GPSL) was established in 2020 with support from the IFU and InfraCo Africa (through PIDG Technical Assistance). Acting as an intermediary offtaker and service provider, GreenCo’s model involves purchasing power from renewable IPPs and selling that electricity to a portfolio of utilities, private sector offtakers (i.e. commercial and industrial users) and competitive markets of the Southern Africa Power Pool (SAPP).
As it grows, GreenCo will serve to accelerate the development of new projects by increasing the attractiveness of Zambia’s renewable energy sector to private investors whilst complementing efforts to incorporate affordable, clean energy into the country’s generation mix. GreenCo will help demonstrate the benefits of the open access regime introduced though recent changes to Zambian electricity sector regulation and also hopes to consolidate Zambia’s position as a major participant in the Southern African Power Pool (SAPP). The company’s long-term ambition is to expand its operations into other countries in the region.
GreenCo represents an important next step in scaling-up renewable energy investment to help mitigate climate change impacts, improve security of electricity supply and increase efficiency in Zambia’s power sector. Once proven, the model could be replicated across sub-Saharan Africa, having a potentially transformational impact on the region’s renewable energy sector.