FMO Structures Innovative US $26.5 Million Debt Package for Zambia’s First Market-Based Ilute Solar Project

FMO Structures Innovative US $26.5 Million Debt Package for Zambia’s First Market-Based Ilute Solar Project

(IN BRIEF) FMO acted as Mandated Lead Arranger on a US $26.5 million financing package for the 32 MWp Ilute Solar Project in Western Zambia. The two-tranche debt structure—senior debt underwritten by FMO, Triodos, and SEFA, plus a subordinated tranche from FMO and ElectriFI—shields senior lenders from SAPP price volatility and attracts commercial investment. Ilute operates under a private PPA with GreenCo Power Services Ltd, trading electricity into the Southern African Power Pool without sovereign guarantees. FMO coordinated with the Zambian government, Barotse royalty, and ZESCO to secure regulatory, land, and grid integration support. A WWF-backed biodiversity plan and a 1 % revenue allocation to a community trust ensure lasting environmental and social impact.

(PRESS RELEASE) THE HAGUE, 20-Jun-2025 — /EuropaWire/ — FMO, the Dutch entrepreneurial development bank, has served as the Mandated Lead Arranger for the financing of the Ilute Solar Project—a 32 MWp photovoltaic installation near Sesheke in Western Zambia. Collaborating with Serengeti Energy, Kwama Energy, and fellow impact financiers ElectriFI, Triodos, and the African Development Bank’s SEFA facility, FMO structured a US $26.5 million debt package that blends commercial and concessional capital to manage price risk in the Southern African Power Pool (SAPP).

The financing comprises two tranches: a senior tranche underwritten by FMO alongside Triodos and SEFA, and a subordinated tranche provided by FMO and ElectriFI with a flexible repayment schedule. By positioning the subordinated layer to absorb SAPP market-price fluctuations, FMO has sufficiently de-risked the senior tranche to attract commercial lenders while safeguarding the project’s overall bankability.

Under this market-based power purchase agreement, Ilute will sell electricity to GreenCo Power Services Ltd, which then trades into the SAPP—marking a shift away from sovereign-backed off-take guarantees. This structure exemplifies FMO’s strategy of leveraging regional power markets and private-sector engagement to alleviate the fiscal burden on government balance sheets.

Key partnerships were facilitated by FMO to ensure project viability: the Government of Zambia provided regulatory certainty; Senior Chief Anang’anga Imwiko and the Barotse Royal Establishment granted land access and community stewardship; and ZESCO, Zambia’s national utility, manages grid integration and collects wheeling fees. Together, these stakeholders created a transparent, replicable model for renewable energy financing across the continent.

Recognizing the importance of environmental and social sustainability, FMO supported the adoption of a WWF-endorsed biodiversity management plan and the dedication of 1 % of annual revenues to a locally governed community trust. These provisions guarantee that Ilute delivers both clean power and tangible community benefits.

By orchestrating this blended-finance structure, FMO reinforces its commitment to empowering private-sector–led energy solutions in emerging markets and advancing Africa’s transition to a decarbonized, resilient energy future.

About the African Development Bank
The African Development Bank (AfDB) is Africa’s premier multilateral development finance institution, supporting economic and social progress across the continent. Burundi is a member of the AfDB Group and a featured country under the Mission 300 initiative, which AfDB co-leads with the World Bank. The Bank’s support includes strategic co-financing and technical assistance to unlock public and private capital for energy access, infrastructure, and inclusive growth.

About EDFI Management Company
EDFI Management Company (EDFI MC) is a multilaterally owned impact asset manager which delivers innovative development finance solutions that enable European DFIs, development banks and private sector investors to increase the scale and impact of their work. The company focuses on business models, technologies and geographies where other investors have not been able to operate at the desired scale given their resources and investment criteria. For more information, visit www.edfimc.eu.

About the Electrification Financing Initiative – ElectriFI
Managed by EDFI Management Company, ElectriFI is an impact-first investment facility, funded by the European Union, USAID’s Power Africa programme, the Government of Sweden and the Government of Italy. ElectriFI is investing in early-stage private companies and projects that increase or improve access to and supply of sustainable energy in developing countries. For more information, visit www.electrifi.eu

About FMO
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50+ year proven track-record in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three sectors that have high development impact: Agribusiness, Food & Forestry, Energy, and Financial Institutions. With a total committed portfolio of EUR ~15 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information: please visit www.fmo.nl

About GreenCo
GreenCo has established itself as a key player in Southern Africa’s renewable energy sector with operations in Zambia, South Africa, Zimbabwe, Namibia and with recent entry to the DRC. Through its role as a creditworthy renewable energy buyer, aggregator and trader, GreenCo enables private sector investment, while simultaneously strengthening the renewable energy market across Southern Africa and improving regional energy security. The company aggregates power and then sells the renewable-generated power to utilities, private sector offtakers, national power trading markets, and on the SAPP.  Its shareholders include Impact Fund Denmark (IFU) and InfraCo Africa, a member of the Private Infrastructure Development Group (PIDG). For more information please see: https://africagreenco.com/

About Kwama Energy
Kwama Energy is an Independent Power Producer (IPP) developing wind and solar PV projects across Zambia and the Zambezi basin.  Kwama brings deep local development expertise and experience in delivering world-class energy infrastructure projects.  The company focuses on opportunities in liberalising regional electricity markets and on powering the critical mineral value chains, essential for the global green revolution.

About Serengeti Energy
Serengeti Energy is a leading renewable independent power producer specializing in the development, construction, and operation of utility-scale renewable energy plants tailored to the needs of both public and private off-takers. The company operates nine power plants across five countries – including seven hydropower plants and two solar plants – in South Africa, Uganda, Rwanda, Malawi, and Sierra Leone. Serengeti Energy is currently constructing its fourth hydropower facility in South Africa and has a portfolio of projects in advanced development in Senegal and Zambia. Owned by development finance institutions such as KfW, STOA, Proparco, Norfund, Swedfund, and the Nordic Development Fund (NDF), Serengeti Energy is committed to expanding sustainable energy solutions across Africa. For further details, visit our website at www.serengeti.energy or visit us on LinkedIn.

About the Sustainable Energy Fund for Africa
SEFA is a multi-donor Special Fund that provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency. SEFA offers technical assistance and concessional finance instruments to remove market barriers, build a more robust pipeline of projects and improve the risk-return profile of individual investments. The Fund’s overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the New Deal on Energy for Africa and the M300.

About Triodos Investment Management
For more than 30 years, Triodos Investment Management (Triodos IM) has been connecting investors who want to put their money towards lasting, positive change with innovative entrepreneurs and sustainable companies that are doing just that. In this way, Triodos IM acts as a catalyst in those sectors that play a key role in the transition to a fairer, more sustainable and more humane world. Triodos IM’s investment activities focus on five interconnected transition themes: Food, Energy, Resource, Societal and Wellbeing. Its mission as a financial player is to enable and accelerate these essential transitions. Assets under management at the end of 2024: EUR 5.8 billion. Triodos IM is a wholly owned subsidiary of Triodos Bank and a globally active impact investor. For more information, visit www.triodos-im.com

Media Contacts:

Monica Beek
Media Spokesperson
T: +31 6 4663 7868
M.Beek@fmo.nl

Paul Helsloot
T: +31 6 1847 9655
P.Helsloot@fmo.nl

SOURCE: FMO