The Sustainable Energy Fund for Africa (SEFA), a trust fund administered by the African Development Bank, has pledged $8 million as part of a broader $26.5 million financing arrangement for the 32-megawatt-peak (MWp) Ilute Solar Project in Zambia.
Located in the western part of Zambia, the Ilute Solar Project is being developed under the Independent Power Producer (IPP) model.
It will supply electricity to the Southern African Power Pool (SAPP) through a market-based Power Purchase Agreement (PPA) with GreenCo Power Services Ltd, a regional power trading company.
This innovative setup eliminates the need for sovereign guarantees and avoids financial strain on the Zambian government, positioning the project as a potential blueprint for similar ventures across Africa, aiming to stimulate private investment and enhance regional energy cooperation.
The financial agreement was officially signed on June 19 at the Africa Energy Forum in Cape Town.
Daniel Schroth, Director of Renewable Energy and Energy Efficiency at the African Development Bank, signed on behalf of SEFA.
Other signatories included representatives from Serengeti Energy, Kwama Energy, EDFI Management Company, and the Dutch development bank FMO.
“SEFA’s involvement in the Ilute Solar Project underscores our dedication to advancing innovative renewable energy solutions in Africa,” said Schroth.
“This initiative stands out for its forward-looking financing model and potential to inspire replication across the continent.”
Supporting Zambia’s National and Continental Energy Vision
The Ilute Solar Project aligns with Zambia’s strategic goal of attracting private capital through the SAPP to improve its electricity infrastructure and energy security.
It is also in line with the African Development Bank’s New Deal on Energy for Africa and its M300 initiative, both of which aim to accelerate access to sustainable energy across the continent.
Beyond energy generation, the project includes a social development component.
In collaboration with the World Wide Fund for Nature (WWF), it will channel 1% of its annual revenue into a community trust.
This fund, managed by local stakeholders, will support development priorities identified by communities living near the project site.
About SEFA
SEFA is a multi-donor special fund that plays a catalytic role in expanding renewable energy access in Africa.
It provides technical support and concessional funding to mitigate investment risks and build a stronger pipeline of clean energy projects.
Its mission is closely tied to the African Development Bank’s broader agenda to deliver affordable, reliable, and sustainable energy for all.
The Ilute Solar Project marks a significant milestone in Africa’s renewable energy landscape, combining financial innovation, regional integration, and community inclusion to pave the way for future clean energy investments.
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