20201027 GreenCo Presentation .pdf



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GreenCo
“RENEWABLE ENERGY IN ZAMBIA”
Conference in Lusaka
27th -28th of October 2020

Funded  by:  

Grant  Support  Provided  by:  

Supported  by:  

VISION STATEMENT

To lead innovation and sustainably
transform renewable energy markets in
Africa

MISSION STATEMENT

Addressing creditworthiness to increase
generation and growth of renewable energy
markets through partnerships and
innovative solutions

Key barriers - Why GreenCo is needed
• More Investments in RE required in SSA: To achieve SDG 7 and to provide clean
affordable power to Sub Saharan Africa, more investments in renewable energies are
required. Current bilateral PPAs between state-owned utilities and DFI funded IPPs are
not scalable.
• Lack of creditworthy offtakers: Weak balance sheets of single buyers in the market
increases risk, funding costs and PPA tariffs.
• Innovative commercial solutions required: As the integration of RE requires more
complex technical solutions, innovative commercial structures need to developed in
parallel.
• Power Markets: Regional, interconnected power markets are required for optimal use of
different RE sources and to create a competitive environment.
3  

Introducing GreenCo
Renewable energy creditworthy intermediary
offtaker
(buyer and seller) that relieves systemic risk and offers
innovative power solutions
GreenCo is:
• A creditworthy buyer of renewable energy - GreenCo
buys power from independent power producers (IPPs),
utilities and SAPP competitive markets
• A reliable and affordable seller of renewable energy GreenCo sells power through long-term contracts to utilities
and private buyers; it also executes shorter-term trades
through the Southern African Power Pool (SAPP)
• A champion of new renewable energy and trading
services
• An aggregator of risk - strongly capitalised, GreenCo
warehouses credit risk of utilities and private buyers,
resulting in reduced tariffs
• An operational aggregator of renewable energy supply
• A scalable business that will cover the entire SADC
market

Phase  1  
Next  phase  
expansion  

4  

Value Proposition of GreenCo
GreenCo combines a strong balance sheet with an operational set-up that both act as risk
  mitigations to allow the offering of bankable offtakes and power trading solutions. Supported and
  funded by the development finance community and established as an impact focused provider to
long-term offtakes and innovative power solutions.

Strong Balance
sheet, backed by
international DFI
investors

Financial
Strength

Operational
Market Player

Operational Entity in the
Zambian power market with
strong relationships to ESI
stakeholder such as ZESCO,
Government of Zambia, IPPs and
Corporates

Technology &
Innovation
World-class market
analytics and
trading & risk system
5  

Zambian Energy Sector Reforms
Energy  Policy  
2019  
Objec4ves    

Energy  Sector  
Reform    
Objec4ves  

• To move away from the Single Buyer Model
• To promote open access to the transmission and distribution grid
• To promote cost reflectivity and new regulation to facilitate the multiplicity of players
in the market and to help diversify risks
• Promotes renewable energy and diversification away from hydro dependency

• Strengthen the Policy, Legislative and Regulatory Framework
• Expedite implementation of the Cost of Service Study
• Introduce new energy sector players in the market – e.g. GreenCo
• Establish a framework multi-buyer multi-seller power trading
 
• The Electricity Act 2019 facilitates a number of new approaches aimed at
reallocating some risk from ZESCO to other participants by shifting the sector from
a single buyer market to a multi buyer market.

New  Legisla4on  and  
Licencing  of  GreenCo  

• Provision for intermediary offtakers and power services providers included in the
new Acts
• Acts introduce the open access regime.
• Consumers can apply to the Minister of Energy to sell or purchase power outside
Zambia. No approval required for sale or purchase on competitive spot market (i.e.
SAPP) or for sales / purchases for emergency purposes.
6  

Benefits & Services
BENEFITS  &  SERVICES  
FOR  GOVTS  &  UTILITIES  

FOR  IPPs  

FOR  CONSUMERS  

• Increased power capacity
through new renewable
energy generation
• Lower tariffs through
increased efficiency of
electricity sector
• Wider economic benefits
through greater employment
and private capital investment
• Environmental benefits

• Bankable Long Term PPAs 15 – 25 year Tenor, backed by
Liquidity Buffers (up to 12-15
months of full PPA revenue)
• Carbon Credits/ Renewable
Energy Certificates
• Cross Border energy supply
• Dynamic Asset Optimisation
and Data Analytics
• Trade excess power from
existing plants/ those with
other offtakers

• Affordable green power supply
• Long term (up to 20 years),
fixed price Power Supply
Agreements
• 24x7 availability (where
technically feasible)
• Certified Renewable Energy
*Targeted at users with
connections > 1MW

7  

Bankable Long Term
PPAs

Services for RE Developers
ü Besides its primary activity of
purchasing power from IPPs in
southern Africa, GreenCo will also
offer them a range of additional
services (see chart).
ü GreenCo can also work with other
players in the electricity sector, e.g.
specialist power storage companies.
ü GreenCo can cover any renewable
energy technology – solar, hydro,
geothermal etc.
ü GreenCo is starting operations in
Zambia, to be scaled up into other
countries in the region soon.

Exclusive
PPA
covering all
generation

Greenfield  
Standalone  
IPPs  
Additional Services
can supplement an
exclusive PPA or be
offered
independently

ü 15 – 25 year Tenor
ü Backed by Liquidity Buffers
(e.g. 12 months of PPA
revenue)
PPA covering
expansion capacity

Brownfield  
Expansion  
IPPs  

Additional Services

PPA covering
capacity in excess
of captive
consumer’s needs

CapFve  /  
Embedded  
GeneraFon  
Projects  

GreenCo can also
cover sale of
intermittent excess
power on SAPP
(subject to technical
and scale
constraints)

ü Sale on SAPP Competitive Markets: On profit-sharing basis with a floor to ensure
project viability; or on behalf of project company on agreed margins
ü Carbon Credits/Renewable Energy Certificates : Administration and Trading (where
available)
ü Cross-border energy trades: Using GreenCo regional entities on either side of the
border
ü Asset optimisation: ​Demand Load-Production Profile matching (for projects able to
adjust generation profile​) ; and Weather based generation forecasting​

8  

What GreenCo Is
Not

GreenCo Is Not:
• A generation or transmission asset owner
• A utility
• A system operator
• A market operator
• A financial vehicle / fund or insurance
product
• A hedge fund type trader

9  

Pipeline and Next Steps
GreenCo’s status and next steps







After years of development work, GreenCo is now its its implementation ph
1st Financial Close in October 2020
Submission of ERB Application in October 2020
Fully operational in Q1 2021 with the ability trade via SAPP
2nd Close of >USD25m targeted for mid-2021
100-150 MW Zambian Portfolio signed by end of 2021

500MW  

Medium Term (3-5 years)
regional portfolio
100  -­‐    
150  MW  
20  -­‐    
50MW  

Target Portfolio, signed until
end of 2021
PV Pilot, with
COD end of
2021

REGISTER YOUR
INTEREST IN
SUPPLYING OR
BUYING RENEWABLE
ENERGY POWER
FROM GREENCO
info@africagreenco.com  
10  

Equity Investors
First Close Investors
Investeringsfonden for Udviklingslande (IFU): IFU is an independent Danish government-owned fund offering advisory services and risk
capital to companies wishing to do business in developing countries and emerging markets. IFU makes risk capital available in the form of
equity, loans or guarantees for project companies in one of the 146 countries eligible for IFU investment.
InfraCo Africa (InfraCo): InfraCo is part of the Private Infrastructure Development Group and supports the development of projects or
innovative infrastructure business “to scale-up and demonstrate commercial viability to attract further investment”. PIDG has committed over
US$1.4bln to 118 projects in the energy sector, with InfraCo committing US$83.8m to support 16 projects, of which 3 are operational.

Additional Second Close Investors (targeted total equity funding >USD25m) (subject to final credit approv
Development Bank of Southern Africa (DBSA): DBSA also acts as the accredited entity for GCF and is the implementation agent
and fund manager for the SADC Project Preparation and Development Facility (PPDF), which awarded Africa GreenCo US$2,145,000
of grant funding to support the appointment of external advisors for GreenCo’s implementation. DBSA sits on the PPDF GreenCo
Project Steering Committee which oversees the deployment of the PPDF funding and progress towards GreenCo’s implementation.
Green Climate Fund (GCF): The GreenCo concept note submitted under the Mobilising Funds at Scale RfP issued by the GCF
Private Sector Facility was shortlisted as one of the top scored concept notes. A full funding proposal achieved approval by ITAP in
March 2020.
The Rockefeller Foundation (RF): RF has provided over $2.7m in grant funding and has provided significant non-financial support to
aid GreenCo’s development. RF is considering a further equity investment from its commercial arm.
FMO: FMO is the Dutch entrepreneurial development bank. It’s stated mission is to empower entrepreneurs to build a better world.

11  

Zambian Development Partners
Ministry of Energy: GreenCo was approved by the GRZ and was specifically recognized as a new entity by the
new energy sector legislation as enacted in 2020.  
ZESCO Ltd: ZESCO is the State owned utility and a key partner to GreenCo as the main partner in the initial
phase, transmission system operator (TSO), wheeler of power, sponsor of GreenCo’s SAPP membership,
beneficiary of power services from GreenCo.
Energy Regulation Board of Zambia (ERB): ERB’s mandate includes regulation over the electricity sector and
will be GreenCo’s key regulator in Zambia.

Ministry of National Planning Development: Government body responsible to “efficiently and effectively
coordinate national planning and economic management in a transparent and accountable manner in order to
achieve sustainable national development”. Appointed as National Designated Authority for the Green Climate
Fund.
 

12  

GreenCo – Team & Career
ü GreenCo’s team currently consist of a dozen experts and young talents in the fields of
renewable energy, project finance, utilities and energy trading
ü GreenCo will have a team of 10-15 local and international energy experts based in Lusaka
ü Innovative, agile team with a strong passion
ü Expansion of local team starts in November 2020

CHECK THE LATEST JOB OFFERINGS (FROM
NOV 2020) AT:
 

www.africagreenco.com/careers  
hRps://africagreenco.com/#team  

 

13  

GPSL Office and Contact Details

Address:  
The  United  Church  House    
Plot  No.8,  First  floor,  Northern  Wing  
Mosi  o  Tunya  Road  
 Woodlands,  Lusaka    
 
Contact  Details:  
Email:  info@africagreenco.com    
Phone  :  +260  211  226  329  
Website:  www.africagreenco.com  

14  

Thank you

15  


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