Ilute Solar Project Reaches Financial Close: A Landmark Market-Based Solar IPP Transaction for Zambia and Southern Africa
Serengeti Energy, Kwama Energy and FMO are pleased to announce that financial close has been successfully achieved on the Ilute Solar Project (“Ilute”), enabling the commencement of construction. This milestone marks the completion of development on one of Zambia’s most innovative renewable energy projects and a new benchmark for privately financed power generation in the region.
Ilute is a 32MWp solar Independent Power Producer (IPP) located near Sesheke in the Western Province of Zambia. Ilute is strategically positioned to support rapidly growing electricity demand across Zambia and Southern Africa and is one of the first generation projects to be financed on the basis of power sales into the Southern African Power Pool (SAPP), an important supplier of power to Zambia, under a market-based Power Purchase Agreement (PPA) with Zambia based GreenCo Power Services Ltd (GreenCo), an innovative regional power trader.
Financial Close Confirms a Breakthrough Project Finance Structure
Reaching financial close confirms the successful implementation of a pioneering project finance structure for renewable energy in Africa. The project’s senior lenders have committed a US$26.5 million financing package, bringing together a blended group of development, commercial, and concessional capital providers comprised of:
- FMO, the Dutch Entrepreneurial Development Bank as the Mandate Lead Arranger, through the Access to Energy fund which FMO manages on behalf of the Dutch government
- The Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank (AfDB);
- EDFI Management Company, through the EU-funded Electrification Financing Initiative (ElectriFI); and
- Triodos Investment Management.
This blended finance structure mitigates traditional investment risks faced by Independent Power Producers and unlocks bankability without reliance on sovereign guarantees. Ilute is Africa’s first non-recourse, project-financed generation project operating under a market-based offtake structure and one of the first greenfield renewable energy projects in Zambia in recent years to secure debt financing at or before the start of construction.
Redefining Power Markets – With Zambia at the Centre
Ilute’s private PPA with GreenCo replaces traditional utility-backed offtake and sovereign support with a competitive, market-driven power trading model. Electricity generated by Ilute will be sold to GreenCo, an active member of the SAPP, supporting regional power flows and deeper electricity market integration.
This approach strengthens Zambia’s grid resilience, supports investment in infrastructure upgrades, and contributes to alleviating regional power shortages - without adding pressure to government balance sheets. Zambia is leveraging the SAPP as a strategic platform to mobilise private capital, enhance energy security, and modernise its power sector.
A Coalition of Stakeholders Delivering a Replicable Model
The achievement of financial close reflects the coordinated efforts of a diverse group of stakeholders, including:
- Serengeti Energy, a leading regional IPP, providing development finance expertise and transaction execution;
- Kwama Energy, a Zambian IPP platform, which originated and co-developed the project;
- The Government of the Republic of Zambia, providing regulatory certainty and legal protections;
- ZESCO, Zambia’s national utility, providing grid / evacuation capacity, thereby assuming grid-related operational responsibilities and earning wheeling revenues;
- The local community, led by Senior Chief Anang'anga Imwiko and the Barotse Royal Establishment, contributing land access and long-term stewardship;
- Investors and lenders, who take on electricity price volatility; and
- GreenCo, as a creditworthy renewable energy buyer and regional trader, aggregating supply, enabling cross-border trade, and reinforcing liquidity and resilience across the SADC power market.
- Southern African Power Pool
This structure mobilises private capital at scale, supports Zambia’s clean energy transition, and provides a transparent, rules-based power trading model that can be replicated in other African markets.
Delivering Environmental and Community Benefits
Beyond clean power generation, Ilute embeds environmental stewardship and local empowerment into its design. The project includes a biodiversity management plan developed in partnership with the World Wide Fund for Nature (WWF) and commits 1% of annual revenues to a community trust, governed by local representatives to fund locally prioritised development initiatives.
A Blueprint for Africa’s Energy Future
With financial close achieved, Serengeti Energy, Kwama Energy, GreenCo and the project’s lenders have demonstrated that a scalable and bankable model for renewable energy development in Africa is possible — the Ilute project combines innovation, regional cooperation, and inclusive growth, and positions Ilute as a blueprint for future private power investments across the continent.
----------------------------------------------------
For more information, please contact:
Ilute | Tiaan Coetzee | tiaan.coetzee@serengeti.energy
FMO | Monica Beek | m.beek@fmo.nl | +31 6 46 63 78 68
About Kwama Energy
Kwama Energy is a Zambian Independent Power Producer (IPP) developing wind and solar PV projects across Zambia and the Zambezi basin. Kwama brings deep development expertise and experience in founding and delivering world-class energy infrastructure projects. Kwama focuses on opportunities in regional electricity markets and on powering the critical mineral value chains, essential for the global green revolution.
About Serengeti Energy
Serengeti Energy is a leading renewable independent power producer specializing in the development, construction, and operation of utility-scale renewable energy plants tailored to the needs of both public and private off-takers. The company operates nine power plants across five countries - including seven hydropower plants and two solar plants - in South Africa, Uganda, Rwanda, Malawi, and Sierra Leone. Serengeti Energy is currently constructing its fourth hydropower facility in South Africa and has a portfolio of projects in advanced development in Senegal and Zambia. Owned by development finance institutions such as KfW, STOA, Proparco, Norfund, Swedfund, and the Nordic Development Fund (NDF), Serengeti Energy is committed to expanding sustainable energy solutions across Africa. For further details, visit our website at www.serengeti.energy or visit us on LinkedIn.
About GreenCo
GreenCo has established itself as a key player in Southern Africa’s renewable energy sector with operations in Zambia, South Africa, Zimbabwe, Namibia and with recent entry to the DRC. Through its role as a creditworthy renewable energy buyer, aggregator and trader, GreenCo enables private sector investment, while simultaneously strengthening the renewable energy market across Southern Africa and improving regional energy security. The company aggregates power and then sells the renewable-generated power to utilities, private sector offtakers, national power trading markets, and on the SAPP. Its shareholders include Impact Fund Denmark (IFU) and InfraCo Africa, a member of the Private Infrastructure Development Group (PIDG). For more information please visit: https://africagreenco.com/
About FMO
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50+ year proven track-record in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & Forestry, Energy, and Financial Institutions. With a total committed portfolio of EUR ~15 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information: please visit: www.fmo.nl
About EDFI Management Company
EDFI Management Company (EDFI MC) is a multilaterally owned impact asset manager which delivers innovative development finance solutions that enable European DFIs, development banks and private sector investors to increase the scale and impact of their work. The company focuses on business models, technologies and geographies where other investors have not been able to operate at the desired scale given their resources and investment criteria. For more information: please visit www.edfimc.eu
The Electrification Financing Initiative
ElectriFI: managed by EDFI Management Company, ElectriFI is an impact-first investment facility, funded by the European Union, USAID’s Power Africa programme, the Government of Sweden and the Government of Italy. ElectriFI is investing in early-stage private companies and projects that increase or improve access to and supply of sustainable energy in developing countries. For more information, please visit: www.electrifi.eu
About the African Development Bank
The African Development Bank (AfDB) is Africa’s premier multilateral development finance institution, supporting economic and social progress across the continent. Zambia is a member of the AfDB Group and a featured country under the Mission 300 initiative, which AfDB co-leads with the World Bank. The Bank’s support includes strategic co-financing and technical assistance to unlock public and private capital for energy access, infrastructure, and inclusive growth. For more information, please visit: www.afdb.org
About the Sustainable Energy Fund for Africa
SEFA is a multi-donor Special Fund that provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency. SEFA offers technical assistance and concessional finance instruments to remove market barriers, build a more robust pipeline of projects and improve the risk-return profile of individual investments. The Fund’s overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the New Deal on Energy for Africa and the M300. For more information, please visit: www.afdb.org/sefa
