Africa GreenCo Group (GreenCo), an energy aggregator and trader in Southern Africa, has partnered with the US International Development Finance Corporation (DFC) to promote increased renewable-energy demand and a stable renewable-energy market across Southern Africa.

GreenCo says this strategic collaboration will help mobilise climate sector finance for critical renewable energy infrastructure in countries including Zambia, South Africa and Namibia, where it currently operates.

The company says the $40-million facility will enhance its creditworthiness by providing a backstop to GreenCo’s payment obligations to private independent power projects (IPPs), enabling the company to position itself as a credit-worthy energy aggregator and trader, and an alternative for IPPs to public utilities suffering from financial and operational strain.

GreenCo says its innovative approach to aggregating renewable-energy-generated power and trading it in national markets, as well as the Southern African Power Pool, aligns with DFC’s mission to drive sustainable economic growth through private-sector engagement.

DFC’s investment is part of its broader mandate to combat the effects of climate change by supporting renewable-energy solutions in developing markets. This collaboration also reflects DFC’s strategic focus on leveraging private-sector capital to drive development impact, particularly in key sectors, such as energy.

By financing renewable-energy initiatives, GreenCo says DFC aims to help build resilient and clean-energy infrastructure in Africa, a region disproportionately affected by the impacts of climate change.

“DFC’s involvement will further enhance our operations and enable us to scale our capacity to provide clean, affordable energy to more people across Southern Africa. With DFC’s facility, GreenCo will be able to access $50-million of Liquidity Buffer Capacity that will back over 350 MW of renewable-energy capacity.

“Together, we can help address the region’s growing demand for energy while supporting global climate goals,” says GreenCo chief investment officer Pug Bennet.

GreenCo says DFC has made energy security a top priority, adding that this partnership with GreenCo is an example of how DFC is leveraging its full suite of tools to drive impactful climate finance.

“DFC is committed to supporting projects that create sustainable and scalable impacts. Our financial support to GreenCo is part of our ongoing effort to help build clean energy economies in Africa and support the region’s transition to a net-zero future,” says DFC energy VP Erica Ehst.

GreenCo adds that DFC has prioritised Africa in its climate finance strategy, investing in catalytic projects that provide long-term solutions to climate-related challenges.

By supporting the energy sector in low-income and lower-middle-income countries, DFC aims to expand economic opportunity, reduce poverty, and help countries meet their climate targets, it says.