Enel Green Power, a subsidiary of Italian utility Enel, has begun construction of the 28MW Ngonye solar project in Zambia, the company announced on 22 August. Ngonye was one of two projects selected during the first round of the World Bank Group’s Scaling Solar programme in June 2016. The project is located in the Lusaka South Multi-Facility Economic Zone in the south of the country. It is expected online in Q1 2019 and generate 70GWh/yr.
Bidding 7.84c/kWh, still one of the lowest tariffs for solar power in sub-Saharan Africa outside of South Africa, the project sent shockwaves through the industry, particularly accompanied by Neoen and First Solar’s Bangweulu project which bid 6.04c/kWh. However, Ngonye encountered difficulties as the site proved unsuitable for a 50MW plant, resulting in the capacity being reduced, and several regulatory fees were overlooked during financial modelling. As a result, there were doubts over whether the project would go ahead.
In the end, development was delayed by eight months, with construction beginning on Bangweulu on 20 December 2017. Proponents of the project will point out that long development times in Africa mean that an eight-month delay is quite normal. Construction on South African renewable energy independent power producers is only just getting under way despite projects being selected in 2015 and a much more mature procurement programme in place. Similarly, the recently closed 158MW Taiba N’Diaye wind power project in Senegal was selected following a tender in 2012.
Ngonye is backed by senior loans agreed in June of $12m from the International Finance Corporation (IFC)-Canada Climate Change Programme, $11.75m from the European Investment Bank, and $10m from the IFC. Enel owns 80% of equity, with the remaining 20% owned by the Industrial Development Corporation of Zambia (IDC), the state-owned organisation which ran the procurement programme and manages state companies including power utility Zesco.
A 25-year power purchase agreement was signed with Zesco in April 2017.
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