P4G Partnership Africa GreenCo Announces the Operationalization of a New Business Model to Scale Renewable Energy in Zambia
ZAMBIA – OCTOBER 29, 2020 – P4G Partnership Africa GreenCo (GreenCo) announced this week the investment of USD 1.5m by Denmark’s Investment Fund for Developing Countries (IFU) and Private Infrastructure Development Group’s InfraCo Africa (InfraCo). This investment completes the partnership’s operational establishment in Lusaka as an intermediary renewable energy buyer/supplier and power services provider.
GreenCo’s transformative role is to mobilize significant private sector investment for renewable energy, to strengthen the national Zambian and Southern African Power Pool (SAPP) electricity markets, and to facilitate a shift away from the current single buyer model.
Since 2018, P4G has collaborated with Africa GreenCo to sharpen its business and secure government approval for its implementation with a primary goal of reaching operationalization and implementation in Zambia and neighboring Southern African countries. P4G awarded Africa GreenCo two rounds of funding to achieve this milestone.
“Africa GreenCo's operationalization is an excellent example of tangible delivery of innovative business model to deliver on SDG 7 goal in Southern Africa region through strategic collaboration. We welcomed Africa GreenCo to P4G's inaugural partnerships cohort in 2018; and since then, have been instrumental in refining its business model and generating interest among investors that has allowed it to operationalize. This investment will deliver the transformative impact of scaling the renewable energy transition in Southern Africa and improving clean energy access in the region,” said Sarbinder Singh, Director of Investments, P4G.
The Southern African region has great renewable energy potential and urgently needs more energy generation to support economic strength and recovery from COVID-19, and to provide clean and affordable energy to its citizens. GreenCo’s model offers key innovations in the architecture of the electricity market and achieves better value – with more electricity generation and improved security of supply – in partnership (rather than in competition) with established industry players.
“P4G’s acceleration workshop for GreenCo in 2019 was a pivotal moment for GreenCo’s implementation – gathering both our public sector partners from the Government of Zambia and potential investors. P4G’s support contributed significantly towards our ability to attract the required investment for full operationalization via Denmark’s Investment Fund for Developing Countries and PIDG’s InfraCo Africa. We look forward to continuing our collaboration with the P4G as we scale up our activities in the rest of the Southern African region,” said Johannes Baake, CFO, Africa GreenCo/GreenCo Power Service Limited.
"Today, we need true paradigm shifts toward low-emission and climate-resilient sustainable development in order to reduce the negative impacts of climate change on sustainable development and growth of Zambia and the Southern African region. We are delighted to be working with GreenCo and a number of Zambia’s key cooperating partners to ensure that new business models, innovation and systemic change is delivered on the ground and felt by those most in need. Through this model we can attract the significant amount of funding required to harness Zambia’s abundant renewable energy resources,” said Alexander Chiteme, Minister of National Development Planning, Zambia.
GreenCo and its investors will remain focused on supporting the Government of Zambia, as well as the governments of other countries in the Southern African Development Community region, in the opening of their electricity markets. The company’s operations will contribute to the implementation of the Government of Zambia’s vision for the electricity sector as set out in the National Energy Policy 2019 and subsequent new energy sector legal and regulatory framework. The significance of this achievement is twofold: more broadly, it underscores the potential success and transformation achieved by multistakeholder partnerships for green growth; and on the ground level, it increases energy investment to help mitigate climate change, improve security of supply, and improve efficiency in the power sector.
“GreenCo is an innovative business model providing a solution that can reduce the financial risk when investing in renewable energy and consequently pave the way for more private investors, which are highly needed if Africa is to succeed in delivering affordable and green energy for all,” said Torben Huss, CEO of IFU.
“GreenCo’s initiative of intermediary power off taker and power trading company is highly innovative and will help the Zambian electricity sector prepare for the future, working together with ZESCO and other key sector stakeholders. We look forward to working with GreenCo in helping it to become operational,” said Gilles Vaes, InfraCo Africa’s CEO.
About P4G: Pioneering Partnerships, Investing in Impact
P4G – Partnering for Green Growth and the Global Goals 2030 - is a global platform with a venture capital approach to accelerating market-based partnerships to build sustainable and resilient economies. P4G bridges the gap between development and investment agendas to deliver inclusive, transformative solutions to meet the Sustainable Development Goals and the Paris Climate Agreement. P4G mobilizes a global ecosystem of 12 partner countries and 6 organizational partners to unlock opportunities for more than 50+ partnerships working in five SDG areas: food and agriculture, water, energy, cities and circular economy.