Online Reporter
Business Reporter
A major 50 million Euro (US$59 million) agreement between GreenCo, Impact Fund Denmark (IFDK) and the European Commission is set to unlock massive investment in renewable energy across Southern Africa.
GreenCo is a renewable energy trader that buys electricity from solar and wind generators to sell across Southern Africa.
Operating in Zimbabwe, Zambia, South Africa and Namibia, it supplies power to national utilities, private businesses and industrial users.
It also actively trades electricity within the Southern African Power Pool (SAPP) to help balance regional energy demand.
Backed by the European Fund for Sustainable Development Plus (EFSD+), the deal provides a critical payment guarantee that makes it safer for private companies to build and fund new power plants.
The 50 million Euro guarantee strengthens GreenCo’s finances, solving the region’s problem of not having enough reliable, long-term electricity buyers.
This security is expected to unlock over 500MW of new renewable energy, helping to end power shortages and speed up the move to green energy.
The guarantee underpins GreenCo’s ability to meet long-term payment obligations to independent power producers (IPPs) across sub-Saharan Africa, including all countries of GreenCo’s current operations.
It directly tackles a major hurdle for energy investment in Africa; the lack of financially stable, long-term power buyers.
By boosting GreenCo’s financial standing, the structure encourages private investors to fund projects in markets previously dismissed as too risky despite their high demand for electricity.
“This guarantee is not just about GreenCo-it is about proving that African power markets can work without sovereign guarantees,” said Ms Cathy Oxby, GreenCo’s chief commercial officer and co-founder.
“By using guarantees to unlock private investment rather than replace it, we can accelerate the energy transition while diversifying risk and leveraging flexibility to deliver innovative solutions to our clients.”
The guarantee operates as a revolving facility, available over a 23-year period. The capital IFDK has invested in GreenCo, which unlocks the EFSD+ guarantee and acts as the first loss.
In finance, a first loss is a guarantee or investment that covers the initial portion of any financial losses, acting as a “buffer” to protect other investors and encourage them to participate in a project.
IFDK plays a key role in administering the guarantee and ensuring compliance with development targets.
The full facility will catalyse investment in new renewable generation capacity across Southern Africa and support GreenCo’s regional trading activities, including bilateral power sales and participation in the Southern African Power Pool, helping to deepen liquidity and accelerate market integration.
“The related EFSD+ and IFDK guarantees are highly bespoke, and the product of creativity and hard work by the combined deal team, said Mr Pug Bennet, GreenCo’s chief finance officer and co-founder
“We are very grateful to both the European Commission and IFDK for their willingness to think outside of the box and work with us to design a practical and impactful solution to address perceived risks.”
Managing director of Impact Fund Denmark Mr Thomas Hougaard, said the initiative was what the EFSD+ was built for.
He noted that by supporting a regional middleman, the European Commission is helping to trigger investments that will provide citizens with clean, affordable, and reliable electricity to drive economic growth.
“This is precisely the type of catalytic intervention the EFSD+ was designed to support,” said Mr Hougaard.
“By backing a regional market intermediary, the European Commission is helping to unlock investment that ultimately delivers clean, affordable, reliable electricity to power the economic growth and affordability of citizens.”
With this milestone, GreenCo further consolidates its role as a first-of-a-kind intermediary offtaker and regional power trader, bridging public policy objectives and private capital to accelerate Africa’s clean energy transition.
Impact Fund Denmark is the Danish state development fund, investing in businesses across the Global South to promote sustainable growth and the green transition.
As a central pillar of Denmark’s global engagement, the fund aims to double its managed capital from the current DKK 18 billion (US$2,84 billion) to over DKK 35 billion (US$4,47 billion) by 2030.
Focusing on sectors such as green energy, infrastructure, and sustainable food systems, the fund has already contributed to the installation of 2 800 MW of renewable energy globally.
