ZESCO and GreenCo execute power transmission agreement

15 Nov 2023
ZESCO and GreenCo execute power transmission agreement

Zambia-based power trader announces System Operations Agreement (SOA) with Zambian National Power Utility, ZESCO Limited, for GreenCo’s supply of electricity from 25MW Ilute Solar PV plant to be located in Sesheke District

Africa GreenCo Group, through its Zambian-based company, GreenCo Power Services Limited, last week announced that it has executed a System Operations Agreement (SOA) with the Zambian National Power Utility, ZESCO Limited.

The SOA was signed by Victor Benjamin Mapani, ZESCO Managing Director and Ana Hajduka the CEO of GreenCo on the 6th of October 2023.

GreenCo is an intermediary electricity trader, purchasing power from clean energy IPPs and selling it to utilities and private sector off-takers and markets of the SAPP.

Supplying power to SAPP

According to a statement from GreenCo, the agreement “defines the operational parameters for GreenCo’s supply of electricity from the 25MW Ilute Solar PV plant.”

The Ilute Solar PV plant is being developed by a consortium comprising Western Solar Power, a Zambian developer, and Serengeti Energy. The plant will be located in Zambia’s Sesheke District, in the Western Province. Its construction is expected to commence in 2024 with commercial operations planned for 2025.

GreenCo will supply power from the plant to the competitive markets of the SAPP through ZESCO’s transmission infrastructure. By leveraging the diversified customer base of the power pool, GreenCo plans to mitigate the risk of customer default. This model, the electricity trader says, replaces the conventional model where projects require the government to provide a sovereign risk guarantee to ensure bankability.

Open access

GreenCo states that this agreement aligns with the Zambian government policy on promoting competition and non-discriminatory access to electricity transmission and distribution infrastructure.

President Hakainde Hichilema, in a speech at the opening of the National Assembly last month, stated that the government is implementing an open access regime to ensure that “private sector players will be able to wheel power to their customers and also help remove ZESCO from entering into unsustainable power purchase agreements.”

Victor Benjamin Mapani ZESCO MD, speaking on the agreement, noted that the utility “is determined to allow for more private participants onto the Electricity Supply Industry in an amenable manner because Zambia is open for business.”

Ana Hajduka, CEO of GreenCo, added that the agreement is a significant milestone in the development of the solar power plant and “contributes to the development of a market framework that facilities greater private investment and operational integration with the national utility in a synergistic manner and bodes well for the future-readiness of Zambia’s electricity sector.”

GreenCo Set to Export Energy from Namibia

Last month, GreenCo, through its Namibian-based operating company GreenCo Renewable Energy Services (Pty) Limited. Was issued a Namibian export licence by the Electricity Control Board (ECB). The company stated that this will “help boost the Namibian electricity sector and facilitate the integration of Namibian Independent Power Producers (IPPs) into the SAPP.”

GreenCo is also seeking to engage with key Namibian electricity sector players to harness the country’s vast renewable energy resources and facilitate the opening of the electricity sector via the Modified Single Buyer (MSB) Market Model. This model, GreenCo says, will allow for market competition resulting in lower tariffs, increased local generation capacity, encouragement of private sector investment in generation, and reduction in the financial liabilities on the government.

GreenCo is funded by the Danish Investment Fund for Developing Countries (IFU), the Private Infrastructure Development Group (PIDG), InfraCo Africa and the EU-funded EDFI ElectriFI (the Electrification Financing Initiative).

Energy & Utilities interviewed Ana Hajduka Shields, CEO Africa GreenCo, this summer, who discussed her company's strategy to de-risk by selling on the Southern African Power Pool. E&U reported earlier that Africa GreenCo received a US grant to study BESS deployment, looking to deploy utility-scale solar PV plus BESS pilot in the Sesheke District. 

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