IFU’s second solar power investment in Malawi

Malawi is one of the poorest countries in the world. As only around 10 per cent of the population has access to electricity there is a strong need for increasing energy supply.

With its second solar park under construction in Malawi, IFU makes an important contribution to support the green transition and improving living conditions in the country. Financing is provided through the Danish Green Future Fund.

In Golomoti village around 100 km from the capital Lilongwe in Malawi, one of IFU’s portfolio companies,
JCM Power Corporation (JCM Power), has started the construction of a 20-megawatt PV solar power park. This is the company’s second solar power park following a 60-megawatt project in Salima that started producing electricity during the fourth quarter of 2021.As only around 10 per cent of the population in Malawi has access to electricity, the additional generating capacity is highly needed. It will contribute to increasing the share of RE in the energy mix in Malawi, create a more reliable power supply and potentially reduce the use of firewood for cooking, which has adverse health effects and leads to deforestation

“Malawi is a country with abundant renewable resources, and we are proud to be a leader in assisting the country in unlocking the potential of renewable energy. With the support of partners like IFU, who are dedicated to being active investors in emerging markets, projects like Golomoti are achievable.” Christian Wray, CEO of JCM Power.

First solar park with battery storage
With support from Innovate UK, Golomoti is the first commercial solar park in Malawi to introduce a Battery Energy Storage System (BESS). In addition to the installation of the solar modules on trackers this will lead to improved performance of the facility. When commissioned in early 2022, it is expected that the Golomoti solar park will provide electricity for more than 100,000 households and reduce CO₂ emissions by around 3,000 tCO2e annually.The two new solar parks erected by JCM Power are in line with the Malawian strategy to attract more private investments in the energy sector, which is estimated to have a funding gap of USD 2.5 billion towards 2030.

“We are pleased to assist the Malawian government in realising its strategy to attract more private investments to the energy sector, and as a first mover, we will hopefully inspire other investors to follow,” said Lars Krogsgaard.

The Danish Green Future Fund is providing loan financing
The financing of USD 13.6 million is provided by IFU through the Danish Green Future Fund set up to support the green transition in Denmark and abroad.

“Having access to additional funding through the Danish Green Future Fund enables IFU to support more projects and accelerate the green transition in developing countries like Malawi,” said Lars Krogsgaard.

The Danish SDG Investment Fund managed by IFU is an investor in JCM Power, which in partnership with PIDG company Infraco Africa Limited (“Infraco Africa”), has developed and provided the equity financing to the Golomoti solar park.

July 12, 2023