DFIC finance support for major IPP PV-parks in Zambia

Client

Listed solar energy company in south Germany

Background

The Zambian market for renewable energies and related services is still developing. Even though the political will to increase the use and expansion of renewables does exist, there is no clear line in the national implementation strategy.

The prevailing energy crisis in Zambia, with electricity being switched off for up to 16 hours a day, is currently leading to increased demand for decentralised, renewable energy plants for own consumption. However, legal regulations for renewable energies are only weakly developed and there are hardly any support mechanisms.
Financing of renewable energy projects in Zambia represents a great challenge, not only because of a relatively weak local capital market and regulatory framework, but also because of the volatile currency. This applies all the more to financing solar parks of utility scale.

Objective

Against this background, DFIC was commissioned as a specialist consultant to support the exploration of possible financing options for larger (utility scale) IPP ground mounted PV parks. This concerned private and especially public financing options.

Results

One focus area of DFIC's services was the identification of suitable local and international investors for equity investments as well as for the granting of loans. In particular, DFIC pre-examined and evaluated investment portfolios and investment strategies of public, private and hybrid (public-private) funds with regard to their suitability for the planned projects.

In addition, Zambia-specific screening of suitable financing offers of public development banks and their specialised private sector departments was carried out. The Zamia-specific screening focused on project finance, corporate finance or mixed financing options (e.g. for newly established SPVs) to finance larger open space PV parks as Independent Power Producer (IPP) projects with up to 10 megawatts of generation capacity.

We are happy to also support you in the development and implementation of your investment projects in international markets. A description of our services in this area can be found in the Financial Advisory section.

Of course, we are also personally at your disposal to tailor our services specifically to your needs.
Please do not hesitate to contact us for further information.

Dr. Jörg-W. Fromme Contact