The Enel Group and Zambia’s Industrial Development Corporation (IDC) signed off on a financing agreement for around US$34 million for the construction of the 34MW Ngonye solar plant in Zambia.
The financing includes senior loans of up to US$10 million from the International Financing Corporation (IFC), up to US$12 million from the IFC-Canada Climate Change Program and up to US$11.75 million from the European Investment Bank (EIB).
The Ngonye project, Enel’s first power plant in Zambia, is located in Lusaka South Multi-Facility Economic Zone in the country’s south.
Enel will invest a total of US$40 million in the construction of the site, which is expected to generate around 70 GWh per year once completed.
The PV installation will be owned by a special purpose vehicle that will see Enel hold an 80% stake and the IDC holding a 20% minority stake.
The project has also signed off on a 25-year power purchase agreement with Zambia’s state-owned utility ZESCO.
Antonio Cammisecra, head of Enel Green Power, said: “The signing of this financing agreement marks an important step toward the start of an operational presence of Enel in Zambia, helping us establish a stronger foothold in the country. We will be contributing to Zambia’s sustainable development through our renewable energy, leveraging on the country’s abundance of resources and cooperation with reputed international and local partners within the framework of the Scaling Solar programme.”
“The ongoing initiative to standardize both tendering and financing processes, is creating economies of scale for solar projects across the African continent improving economic viability and resulting in the development of solar power in smaller markets and developing countries,” EIB Vice-President Andrew McDowell said.
“Scaling Solar has set a new standard for the development of solar power in Africa, starting with these two projects in Zambia,” said IFC Chief Executive Philippe Le Houérou.
Multi-facility economic zones: Can a government discriminate between businesses in economic zones and those located elsewhere within the same city? Does it make sense whether social,political or economic?
In early 2016, government through IDC reported that they had signed two PPPs each 50MWs after a competitive international bidding.
HE President EL in fact did promise that nation that these solar projects will be ready by July 2016. One wonders what became of these two projects and how this current one differs from the previous two.
A low of excitement was raised over the solar power projects and some private developers have been ready to go it alone by for the poor inertia from IDC.
The 20MW Power Purchase Agreement have equally not yielded any completed works on solar power generated projects.
The challenge we have in this sector like many others is lack of policy consistent which takes away the credibility of IDC to sustain guarantees on investor ROI.
Lastly, am…
I would want to know more about IDC and how different it is from institutions like Zesco. Seriously am lost on this one and hope am not the only one.
#3 Victorialfalls, you are not the only one and you will see a lot of overlaps, duplication and inconsistences between IDC, and Zesco and other parastatals. I don’t think that even the two parties know their boundaries!!
You borrow $19 million from ZCCM then you go outside again and start borrowing why not use that same $19 million so that you own 75 % of the project.