The 34 MW Ngonye solar photovoltaic (PV) plant, in Zambia, has been connected to the country’s grid and has started operations.
Once fully up and running, the facility is expected to produce about 70 GWh of electricity yearly and help the Southern African country diversify its power mix away from its current reliance on hydroelectricity.
The Zambian government has launched a series of initiatives to promote the development of renewables and has set a goal of installing up to 600 MW of solar PV capacity in the next two to three years.
Located near to the capital city of Lusaka, the power station has been built by Enel Green Power (EGP), which was awarded the right to develop, finance, construct, own and operate the plant in June 2016.
The development, which is EGP’s first in Zambia, is supported by a 25-year power purchase agreement signed with Zambia’s State-owned utility, Zesco.
A special purpose vehicle, 80% held by EGP, the renewable-energy arm of Italian energy group Enel, and 20% by Zambia’s Industrial Development Corporation (IDC), owns the power station.
The Enel Group has invested about $40-million in the facility and, in June 2018, signed a financing agreement with Zambia’s IDC worth $34-million for its construction.
The financing package involved senior loans of up to $10-million from the World Bank group’s International Financing Corporation (IFC), as well as up to $12-million from the IFC-Canada Climate Change Program and a further $11.75-million from the European Investment Bank.
The Ngonye project is the second to be developed in Zambia as part of the World Bank Group’s Scaling Solar programme, which offers a “best-in-class” framework for the procurement of solar projects from independent power producers (IPPs).
The first plant commissioned under the scheme was the 54 MW Bangweulu solar PV station, developed in north-eastern Zambia by French renewable-energy company Neoen.
In parallel, the Zambian government launched another tender for an additional 100 MW of solar PV under the GET FiT solar framework. In April, solar PV projects, with a combined capacity of 120 MW, were awarded to six IPPs, at a competitive weighted average of $0.044/kWh.
The tariffs associated with the Ngonye and Bangweulu projects were below $0.08/kWh.
EGP head Antonio Cammisecra said the Ngonye project showed that, with effectively designed programmes, private investment could be attracted to build renewables capacity in Africa.
Besides Zambia, EGP has over 500 MW of renewables in operation in South Africa and a further 700 MW in execution. It has also bee awarded 100 MW of solar capacity in Ethiopia and has 180 MW of wind capacity in execution in Morocco.
“Through this project we are boosting the Zambian 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,” Cammisecra said.