AfDB loan of USD 8m to help advance 25-MW solar project in Zambia

The African Development Bank Group (AfDB) on Wednesday said it has approved an USD-8-million (EUR 7.4m) concessional loan to back the construction of a 25-MW solar project in Zambia, which has faced rising costs due to the COVID-19 pandemic and other challenges.

The financing comes from the Sustainable Energy Fund for Africa (SEFA), a multi-donor special fund managed by the bank.

The solar project, called Ilute, is being developed in Zambia's Sesheke District by Serengeti Energy Ltd and Western Solar Power Ltd. GreenCo Power Services Ltd has competitively selected the project as a pilot for its energy aggregator model under Zambia’s open grid access framework. GreenCo will act as an intermediary off-taker, buying the plant’s generation under a 25-year power purchase agreement and selling it to the Southern African Power Pool Day-Ahead Market.

"SEFA’s support has been instrumental in bridging the financing gap and will pave the way for future projects that contribute to Southern Africa’s energy transition,” said Daniel Schroth, AfDB director for renewable energy and energy efficiency.

Anton-Louis Olivier, CEO of Serengeti Energy, said SEFA’s support will help move the Ilute project forward. “This loan addresses the financial challenges we’ve faced due to the pandemic and rising costs. The Ilute project is a testament to innovative collaboration and serves as a pioneering model for future renewable energy initiatives in Zambia as well as the wider region,” Olivier added.

This article originally appeared on Renewables Now