By Cecilia Chiluba/Zambia/Lusaka
GreenCo has secured a landmark €50 million guarantee from the European Commission, and an additional US$6 million equity investment from Impact Fund Denmark (IFDK), in a move expected to significantly strengthen electricity markets across sub-Saharan Africa, including Zambia.
The facility is provided under the European Fund for Sustainable Development Plus (EFSD+) and marks a major milestone in efforts to unlock private investment in Africa’s power sector.
The guarantee is extended to GreenCo on a back-to-back basis through IFDK, which also plays a key role in administering the facility and ensuring compliance with development objectives.
The combined support enhances GreenCo’s ability to meet long-term payment obligations to Independent Power Producers (IPPs) operating in its current markets—Zambia, South Africa, Zimbabwe, Namibia and the Democratic Republic of Congo (DRC).
GreenCo Chief Commercial Officer and Co-Founder Cathy Oxby, said by doing so, the structure directly addresses one of the long-standing challenges facing Africa’s energy sector such as the lack of creditworthy, and long-term electricity off-takers.
“By strengthening GreenCo’s balance sheet and demonstrating investment-grade creditworthiness, the structure facilitates the flow of private capital into markets historically considered too risky despite strong fundamentals and urgent demand.”
“”This guarantee is not just about GreenCo – it is about proving that African power markets can work without sovereign guarantees.By using guarantees to unlock private investment rather than replace it, we can accelerate the energy transition while diversifying risk and leveraging flexibility to deliver innovative solutions to our clients,” Oxby noted.
With an improved balance sheet and strengthened credit profile, GreenCo is expected to attract increased private capital into power markets that have traditionally been viewed as high-risk, despite strong demand and solid underlying fundamentals.
The EFSD+ guarantee operates as a revolving facility available over a 23-year period. The US$6 million investment from IFDK acts as first-loss capital, enabling the guarantee to be mobilized while mitigating risk for private investors.
The facility is expected to catalyse investment in more than 500 megawatts of new renewable energy capacity across Southern Africa. It will also support GreenCo’s regional power trading activities, including bilateral electricity sales and participation in the Southern African Power Pool (SAPP), helping to deepen market liquidity and accelerate regional power market integration.
And GreenCo Chief Finance Officer and Co-Founder, Pug Bennet described the transaction as highly bespoke, crediting collaboration between the European Commission, IFDK and GreenCo for developing an innovative structure to address perceived investment risks in African power markets.
“The related EFSD+ and IFDK guarantees are highly bespoke, and the product of creativity and hard work by the combined deal team. We are very grateful to both the European Commission and IFDK for their willingness to think outside of the box and work with us to design a practical and impactful solution to address perceived risks,” Bennet added.
GreenCo said the facility positions the company to play a larger role in accelerating Africa’s energy transition by enabling more competitive, reliable and sustainable electricity markets across the region.
