GreenCo, Impact Fund Denmark (IFDK) and the European Commission have closed a €50 million guarantee under the European Fund for Sustainable Development Plus (EFSD+).
According to a statement made available to the media today by GreenCo, the guarantee is provided to GreenCo on a back-to-back basis via IFDK, who have also invested an additional $6 million adding that this combined facility marks a watershed moment for the development of competitive electricity markets in sub-Saharan Africa.
The statement also states that 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, namely Zambia, South Africa, Zimbabwe, Namibia and the DRC.
The statement further states that by strengthening GreenCo’s balance sheet and demonstrating investment-grade creditworthiness, the structure facilitates the flow of private capital into markets historically considered too risky despite strong fundamentals and urgent demand.
Meanwhile, GreenCo’s Chief Commercial Officer and Co-Founder, Cathy Oxby said the guarantee is not just about GreenCo but it is also about proving that African power markets can work without sovereign guarantees.
“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,” added Ms Oxby.
The guarantee operates as a revolving facility, available over a 23-year period and the full facility should catalyse investment in over 500Mega Watts of new renewable generation capacity across
Southern Africa.
“The related EFSD+ and IFDK guarantees are highly bespoke, and the product of creativity and hard work by the combined deal team,” explained 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,” added Mr Bennet.
The transaction aligns squarely with the EU’s Global Gateway strategy, supporting energy transition, regional integration, and private sector mobilisation in priority African markets.
“This is precisely the type of catalytic intervention the EFSD+ was designed to support,” said Thomas Hougaard, Managing Director of Impact Fund Denmark.
Mr Hougaard noted that 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 to citizens.
