Africa GreenCo secures US$40M liquidity facility from DFC

AFRICA – Africa GreenCo has secured a US$40 million loan facility from the United States International Development Finance Corporation (DFC) to support its renewable energy initiatives in Southern Africa.

The facility aims to enhance GreenCo’s creditworthiness, facilitate power purchase agreements, and boost investments in renewable energy, particularly in Zambia, Namibia, and South Africa.

Pug Bennet, GreenCo’s Chief Investment Officer, expressed optimism about the impact of DFC’s involvement, stating that the loan will scale up GreenCo’s capacity to provide clean, affordable energy across the region.

“With DFC’s facility, GreenCo will be able to access USD 50 million of liquidity, backing over 350MW of renewable energy capacity,” Bennet noted.

DFC’s support is part of its broader mission to combat climate change by backing renewable energy projects in developing markets.

Erica Ehst, DFC’s Vice President of Energy, emphasized the corporation’s commitment to building resilient, clean energy infrastructure in Africa, a region disproportionately affected by climate change.

“Our financial support to GreenCo is part of our ongoing effort to help build clean energy economies in Africa and support the region’s transition to a net-zero future,” she stated.

In addition to this loan, Africa GreenCo recently signed a US$27 million guarantee with GuarantCo, owned by the Private Infrastructure Development Group (PIDG), to bolster renewable energy efforts in Southern Africa.

This guarantee aims to unlock up to US$270 million in private capital for independent power projects (IPPs), allowing them to sell energy to private off-takers and through the Southern Africa Power Pool market.

The guarantees issued under this agreement will enable GreenCo to purchase power from IPPs and back the company’s payment obligations.

Layth Al-Falaki, CEO of GuarantCo, expressed satisfaction with the transaction, highlighting that it aligns with PIDG’s 2023–2030 climate action strategy.

The deal is expected to bring between 200MW and 300MW of renewable energy online, improving electricity access for grid-tied businesses and end-users, while reducing greenhouse gas emissions.

This development comes amid severe power shortages in South Africa. Eskom, the state-owned power utility, announced in February 2024 the implementation of Stage 6 power outages, removing 6,000 megawatts of demand from the national grid.

As such, the renewable energy projects supported by GreenCo and its partners are seen as vital for mitigating power challenges in the region.

This is the second major transaction between PIDG and Africa GreenCo. Previously, GreenCo leveraged a PIDG Technical Assistance grant in 2020 to help operationalize its power services in Lusaka.

In 2022, InfraCo Africa invested US$5.5 million to scale GreenCo’s operations, establishing it as Zambia’s first renewable energy buyer and services provider.

Bennet highlighted the importance of the guarantee facility, noting that it would help GreenCo’s IPPs reach financial close and begin constructing much-needed power infrastructure for Southern Africa.

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