The grid-connected 100 MW Chisamba solar PV project, in Zambia, has secured $71.5-million from financial services firm Stanbic Bank Zambia, with financing anchored by a 13-year power purchase agreement with GreenCo Power Services.

GreenCo will supply the energy to copper mining company First Quantum Minerals (FQM), with blended renewable power to support critical industrial operations under a separate power supply agreement.

The project will be developed by Kariba North Bank Extension Power Corporation (KNBEPC), which is a wholly owned subsidiary of Zambian national power utility Zesco.

While KNBEPC’s solar generation is available during daylight hours, GreenCo ensures continuous baseload delivery to FQM by blending solar with other sources from within the Southern African Power Pool.

Zesco provides the transmission backbone and other services under use-of-system and system operations agreements with GreenCo and is appropriately compensated.

The solar energy generated by KNBEPC will be integrated into a firm baseload profile tailored to FQM’s operational requirements.

The plant is grid-connected and will inject power into Zambia’s national transmission system, thereby significantly supplementing the volume of energy available to meet the country’s commercial and residential needs.

While this energy is contracted to FQM, it displaces energy that would otherwise have been delivered to FQM, freeing up such energy for delivery by Zesco to other Zambian consumers, the company says.

Commercial operation is expected to be achieved in June.

State-owned infrastructure company Power China is the engineering, procurement and construction contractor and has mobilised and started construction well ahead of financial close, which demonstrates long-term commitment to the transaction.

The agreement demonstrates that a well-structured private offtake can unlock large-scale funding and derisk project development, enabling financial close to be achieved without sovereign guarantees or government support, GreenCo says.

The Stanbic Bank Zambia loan is provided directly to KNBEPC with no recourse to Zesco, and the transaction delivers direct value to the public sector by enabling 100 MW of new capacity to be added to the grid, without Zesco assuming any financial obligations.

Zesco also receives improved transmission revenues through the use-of-system agreement with GreenCo, and benefits from stronger grid stability.

The project also contributes to a more climate-resilient, diversified energy mix, aligned with Zambia’s Integrated Resource Plan and international climate goals, GreenCo says.

The structure of the agreement provides a direct boost to national energy availability, and helps to close a supply gap.

GreenCo’s ability to absorb price volatility and offer liquidity support made the transaction bankable under a short, efficient debt structure, it says.

Further, the transaction delivers comparable tariffs under a shorter debt profile, which reduces refinancing risk and long-term exposure while accelerating the return on investment of the project.