Africa GreenCo Secures USD 27 Million Guarantee Facility with GuarantCo to Advance Renewable Energy in Southern Africa
Africa GreenCo Group (GreenCo) has finalized a landmark USD 27 million Guarantee Facility agreement with GuarantCo, a part of the Private Infrastructure Development Group (PIDG), in a significant move towards bolstering renewable energy infrastructure in Southern Africa.
This partnership aims to catalyze renewable energy projects across the region, with a particular focus on GreenCo’s inaugural project, the Ilute Project in Zambia’s Western Province.
Under the terms of the agreement, GuarantCo will extend guarantees to Independent Power Projects (IPPs) supplying energy to GreenCo. These guarantees, backed by GuarantCo’s robust credit rating, will reassure IPPs and their lenders, thereby enhancing project bankability and attracting vital investment in renewable energy generation.
The Guarantee Facility also offers the flexibility to increase support up to USD 50 million, underscoring the commitment to fostering the growth of sustainable energy initiatives.
Speaking at the signing ceremony, GreenCo’s Chief Investment Officer, Pug Bennet, highlighted the significance of GuarantCo’s backing in reinforcing GreenCo’s market credibility.
He commended the diligence and support demonstrated by GuarantCo in crafting a tailored Guarantee Facility, essential for facilitating financial closure and commencement of construction for critical energy projects.
Layth Al-Falaki, CEO at GuarantCo, expressed enthusiasm for the collaboration with Africa GreenCo, aligning with PIDG’s strategic focus on climate action. He emphasized the importance of innovative financing solutions to accelerate private investment in sustainable infrastructure, underscoring GuarantCo’s commitment to supporting GreenCo’s growth and promoting solar photovoltaic projects in the region.
The partnership between GreenCo and GuarantCo is poised to address the challenge of creditworthy off-takers, a significant barrier to realizing the vast renewable energy potential of Southern Africa. By providing guarantees and fostering collaboration, the initiative aims to meet the region’s growing power demands while advancing sustainable development objectives.
Chris Taylor, Deputy Director of UK JETP Envoy at FCDO, lauded the agreement as a testament to the efficacy of innovative finance in mobilizing private investment for inclusive infrastructure development.
He highlighted the facility’s role in supporting the Just Energy Transition, contributing to decarbonization efforts and addressing energy challenges in the region.
The Guarantee Facility signing underscores a shared commitment to advancing renewable energy solutions in Southern Africa, marking a significant step towards achieving sustainable and inclusive development goals.
