Enel Green Power, Enel Group’s renewable energy business, has started operations of the 34 MW Ngonye solar PV plant, the group’s first power plant in Zambia. The facility, in the Lusaka South Multi-Facility Economic Zone in the country’s south, is part of the World Bank Group’s Scaling Solar program.
The project will be carried out by Zambia’s Industrial Development Corporation (IDC), which in June 2016 awarded Enel the right to develop, finance, construct, own and operate the plant.
“With the connection to the grid of Ngonye in Zambia, we are reconfirming our commitment to helping the country leverage on its vast wealth of renewable resources, which poses a great opportunity for growth,” said Antonio Cammisecra, head of Enel Green Power. “Through this project we are boosting the government’s ambitious push to improve access to electricity throughout the country while diversifying its generation mix to hedge against severe drought and climate change effects. This successful project also confirms that effectively designed development program like Scaling Solar are key to attracting private renewable investments in Africa.”
The Ngonye solar plant, which is owned by a special purpose vehicle 80% held by Enel and 20% by the IDC, is supported by a 25-year power purchase agreement with Zambian state owned utility ZESCO. Once fully up and running, the facility is expected to generate around 70 GWh per year.
Enel Group invested around $40 million in the construction of Ngonye. In June, Enel signed a financing agreement with the IDC for around $34 million for construction of the plant, involving senior loans of up to $10 million from the International Finance Corporation (IFC), a member of the World Bank Group; up to $12 million from the IFC-Canada Climate Change Program; and up to $11.75 million from the European Investment Bank.
Zambia has a significant need to diversify an energy generation mix dominated by hydropower, with the aim of increasing the security and quality of supply by meeting the country’s growing electricity consumption demand and encouraging the electrification of rural areas. Zambia’s government launched initiatives to promote the development of renewables with a particular focus on PV power, setting the goal of installing up to 600 MW of PV capacity within two to three years.
Within that framework, the IDC launched a tender for the development of two PV projects with a total capacity of up to 100 MW, structured according to the World Bank Group’s Scaling Solar program, with the IFC acting as advisor. At the same time, the Zambian government launched another tender for an additional 100 MW of PV, to be awarded under the GET FiT solar framework.