IFC and Canada invest in Zambia solar project
International Finance Corporation and the Government of Canada are providing approximately $25 million in financing for the second Scaling Solar project under development in Zambia, allowing construction to start on a solar plant that will provide clean and affordable power to ease the country’s energy shortages.
The financing package arranged by IFC includes senior loans of up to $10 million from IFC and up to $12 million from the IFC-Canada Climate Change Program, plus $2.5 million in interest-rate swaps from IFC and a $2.8 million partial risk guarantee from the World Bank’s International Development Agency.
The European Investment Bank is also providing $11.75 million in loans to the project that will be built near the capital Lusaka by Enel.
Scaling Solar is a World Bank Group initiative that offers competitive bidding and simplified procurement for grid-tied photovoltaic power, even in small markets. The program is supporting the development of more than 1 gigawatt of solar power across Africa.
“Scaling Solar has set a new standard for the development of solar power in Africa, starting with these two projects in Zambia,” said IFC CEO Philippe Le Houérou. “We are very pleased to see these projects moving toward construction as the program continues to expand across Africa and into new regions.”
Construction on the first Scaling Solar project in Zambia, under development by Neoen/First Solar, is expected to start shortly. That project also located near Lusaka has a tariff equivalent to 6 U.S. cents per kilowatt.
The project built by Enel will provide power to the Zambian grid at the equivalent of 7.8 U.S. cents per kilowatt hour — also one of the lowest prices for electricity in the region.
“It is exciting to see this project move toward construction,” said Mateyo C. Kaluba, CEO of Zambia’s Industrial Development Corporation. “We are looking forward to continued engagement with Scaling Solar on a new round of projects as we continue to advance new, clean, affordable energy sources in Zambia.”