Market transformation
GreenCo’s innovative model – having been supported by InfraCo to reach the necessary scale now has potential for replication, something which could have a transformational impact on sub-Saharan Africa’s renewable energy sector.
| Company | Africa GreenCo |
| Sector | Power / Energy |
| Country | Zambia, South Africa, Namibia |
| PIDG Commitment |
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| Dates of PIDG involvement | 2020 – present |
Climate vulnerability, coupled with a steadily rising demand for power, has made increasing installed generation capacity a long-term priority for governments across southern Africa. Despite efforts to proactively open up the region’s power sector to private investment, the limited appetite of commercial financing for renewable energy independent power producers (IPPs) has, to date, limited the project pipeline and impeded ambitions for growth in the renewable energy sector.
Acting as an intermediary offtaker and service provider, Africa GreenCo purchases power from renewable IPPs and sells 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) PIDG has supported GreenCo’s growth through deployment of technical assistance, equity, and a facility that can issue guarantees directly to the IPPs from whom GreenCo will buy power, whilst backing the company’s payment obligations to such IPPs.
GreenCo is accelerating the development of new projects by increasing the attractiveness of the region’s renewable energy sector to private investors whilst complementing wider efforts to incorporate affordable, clean energy into the region’s generation mix.
GreenCo’s innovative model – having been supported by InfraCo to reach the necessary scale now has potential for replication, something which could have a transformational impact on sub-Saharan Africa’s renewable energy sector.
GreenCo represents an important next step in scaling-up renewable energy investment to help mitigate climate change impacts. Through the guarantee transaction, between 200MW and 300MW of renewable energy is expected to be brought online.
The GreenCo model is expected to improve security of electricity supply and increase efficiency in the region’s power sector.
Alongside funding from the IFU, PIDG technical assistance funds were used to operationalise GreenCo’s Lusaka-based company, GreenCo Power Services (GPSL) before project development equity came in.
The guarantee is expected to enable >USD 270m of private sector investment in IPPs. The innovative guarantee structure and GuarantCo’s high credit ratings will provide IPPs and their lenders comfort to enter contracts and build renewable power projects.
