The GCF board approved the first funding proposal of the African Development Bank (AfDB) for Zambia’s Renewable Energy Financing Framework at its 19th board meeting in South Korea.
Overall, it has earmarked $50 million in the form of a loan, and another $2.5 million as a grant.
The framework is looking to finance 100 MW of renewable energy projects – the lion’s share of which will be solar – under Zambia’s Renewable Energy Feed-in-Tariff (REFiT) policy. The aim is to diversify the country’s energy mix, which is currently heavily dependent on hydro.
“Facing a serious electricity supply deficit due to recent droughts, the Government of the Republic of Zambia launched the REFiT policy in 2017 to crowd-in private investments for small-scale renewable projects up to 20MW,” said the AfDB in a statement released.
This is the first program that the GCF and AfDB will be co-financing, following the signing of the Accreditation Master Agreement last November, which resulted in the bank becoming a credited implementer of GCF-approved projects.
In February, Zambia marked the official launch of its GET FiT scheme, which is a part of the REFiT program, and aims to tender up to 100 MW of PV as a first step.
GET FiT is the sum of several components: A standardized set of bankable legal documents developed with Zambian stakeholders; risk mitigation and financing support; and technical assistance ranging from input on solar PV grid integration to procurement support.
The project will be the first utility-scale solar farm in Zambia, when complete, and the first under the Scaling Solar program to be built exclusively for grid connection.