Regional collaboration and innovative financing addresses Zambia’s energy crisis

GreenCo FinanceCo will use the facilities to prepay for over 130MW of electricity imports during the current energy crisis, alleviating the financial pressure on its clients to prepay for the power they need. The requirement to prepay for electricity has been a significant financial constraint on offtakers in Zambia. This strategic collaboration would not have been possible without the cooperation and support of Zambia’s national utility, ZESCO, and comes at a crucial time as Zambia faces a prolonged electricity crisis caused by the ongoing drought, which has significantly reduced hydropower generation. 

Johannes Baake, Chief Financial Officer at GreenCo noted that: “Innovation is an integral part of GreenCo’s DNA. These facilities bridge the gap between the need for imports to be prepaid and the commercial imperative for power consumed to be post-paid. The ability to prepay for electricity on behalf of our clients is a significant step in addressing the immediate energy challenges faced in Zambia, enabling us to import more power and serve more Zambian industries. The imported volumes exceed the immediate needs of our clients, ensures that their industrial operations remain uninterrupted, while also freeing up electricity for households and smaller businesses. We are grateful to ZESCO for their ongoing collaboration and to Stanbic and Standard Bank for their confidence and support in our mission to bring sustainable energy solutions to the region to ensure energy security in Africa.” 

Helen Lubamba, Head of Corporate and Investment Banking at Stanbic Bank Zambia said: “We are proud to be able to support GreenCo in their efforts to address the energy challenges facing Zambia. By providing these prepayment facilities, we are not only supporting critical business ventures but also contributing to the national and regional effort to mitigate the impact of the electricity crisis. This loan facility is an investment in Zambia's future, ensuring that businesses, communities and consumers have access to the power they need for growth and development. Additionally, the structure of this facility answers the call to find innovative funding solutions in addressing the energy shortfall.”

Sherrill Byrne, Executive in the Energy and Infrastructure Finance team at Standard Bank, added “We have been actively following the progress of GreenCo over recent years and discussing a number of potential transactions across the SADC region. We are delighted to be supporting our colleagues at Stanbic Zambia in providing these facilities and hope it will be the first of many transactions with GreenCo in the region.” 

This innovative financing arrangement highlights GreenCo’s role in helping to balance regional energy deficits and surpluses, facilitating cross-border power trade, and enhancing GreenCo’s creditworthiness and reputation as a key player in the energy space within the Southern African Development Community. We are optimistic about the positive impact this prepayment model will have on both the economy and regional integration.