Financing agreed for 47.5-MW solar project in Zambia

Financing has been secured for a 47.5-MW project in Zambia developed by Neoen SAS and First Solar Inc (NASDAQ:FSLR) under the World Bank Group’s Scaling Solar programme.

The International Finance Corporation (IFC) said Wednesday it will provide up to USD 13.3 million (EUR 11.2m) in senior loans for the solar photovoltaic (PV) project. The IFC-Canada Climate Change Program and the Overseas Private Investment Corporation (OPIC) will also lend up to USD 13.3 million each. The financing package also includes a partial risk guarantee from the International Development Agency and an interest rate swap from IFC.

The Neoen/First Solar consortium and the Industrial Development Corporation of Zambia (IDC) are providing equity for the solar project. They own project company Bangweulu Power Corp Ltd through which the project financing agreements have been signed.

Neoen and First Solar have issued a “notice to proceed” for the construction of the solar power plant, which will use thin film modules by the US solar makor. They won the project in a tender in June 2016, the first for the country under the Scaling Solar programme, offering to sell power at just USD 0.06015 per kWh for 25 years. The other winner in that tender, Enel Green Power, is seen to achieve financial close on its 28.2-MW solar project in the coming months, the IFC noted.

Scaling Solar helps governments to quickly contract large-scale solar capacity with private financing. It provides technical assistance, templated documents, pre-approved financing, insurance products, and guarantees. Countries in Latin America, Asia and the Middle East are in talks to join the programme, which has the financial support of the US Power Africa initiative, the Netherlands, Denmark, the UK and the World Bank’s DevCo.

(USD 1 = EUR 0.84)

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