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:
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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
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The Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank (AfDB);
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EDFI Management Company, through the EU-funded Electrification Financing Initiative (ElectriFI); and
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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:
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Serengeti Energy, a leading regional IPP, providing development finance expertise and transaction execution;
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Kwama Energy, a Zambian IPP platform, which originated and co-developed the project;
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The Government of the Republic of Zambia, providing regulatory certainty and legal protections;
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ZESCO, Zambia’s national utility, providing grid / evacuation capacity, thereby assuming grid-related operational responsibilities and earning wheeling revenues;
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The local community, led by Senior Chief Anang’anga Imwiko and the Barotse Royal Establishment, contributing land access and long-term stewardship;
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Investors and lenders, who take on electricity price volatility; and
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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.
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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.
