A €50 million guarantee is set to improve bankability and provide long-term, creditworthy offtake for independent power producers (IPPs) in five countries, including Zimbabwe, in a breakthrough for private sector investment in Southern Africa’s electricity markets.
The guarantee was closed by renewable energy trader GreenCo, Impact Fund Denmark (IFDK) and the European Commission under the European Fund for Sustainable Development Plus (EFSD+).
For Zimbabwe, where weak utility balance sheets and sovereign risk have long deterred private capital, the facility offers an alternative route to financing new renewable power projects, eliminating the need for government guarantees and potentially accelerating capacity additions amid persistent power shortages.
The guarantee is provided to GreenCo on a back-to-back basis via IFDK, which has also invested an additional US$6 million as first-loss capital.
This structure underpins GreenCo’s ability to meet long-term payment obligations to IPPs operating in its five active markets: Zimbabwe, Zambia, South Africa, Namibia and the Democratic Republic of Congo.
By strengthening GreenCo’s balance sheet and demonstrating investment-grade creditworthiness, the facility directly addresses one of Africa’s most stubborn power-sector challenges — the absence of reliable, long-term offtakers — and enables private capital to flow into markets that have been historically viewed as too risky.
“This guarantee is not just about GreenCo — it is about proving that African power markets can work without sovereign guarantees,” said 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 delivering innovative solutions to our clients.”
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The guarantee operates as a revolving facility over 23 years, with IFDK administering the structure and ensuring compliance with development and impact targets.
The full facility is expected to catalyse more than 500MW of new renewable generation capacity across Southern Africa, while supporting GreenCo’s regional trading activities, including bilateral power sales and participation in the Southern African Power Pool (SAPP) — a key platform for regional electricity trade.
GreenCo is already an active trader on SAPP and holds the necessary licences to operate across the region, positioning it as a critical intermediary between power producers and utilities.
“The EFSD+ and IFDK guarantees are highly bespoke and the product of creativity and hard work by the combined deal team,” said Pug Bennet, GreenCo’s chief finance officer and co-founder.
“We are grateful to the European Commission and IFDK for their willingness to think outside the box to address perceived risks with a practical, scalable solution.”
The transaction aligns with the EU’s Global Gateway strategy, which seeks to mobilise private investment into strategic infrastructure while maintaining fiscal discipline.
This is precisely the type of catalytic intervention the EFSD+ was designed to support,” said Thomas Hougaard, managing director of Impact Fund Denmark.
By backing a regional market intermediary, the European Commission is unlocking investment that delivers clean, affordable and reliable electricity to support economic growth.”
GreenCo operates as a renewable energy buyer and trader, purchasing electricity from renewable generators and selling it to utilities, commercial and industrial users, national markets and the competitive SAPP platform.
IFDK is Denmark’s state development finance institution, currently managing DKK18 billion (US$2,84 billion) and targeting growth to over DKK35 billion (US$5,53 billion) by 2030, with a focus on sustainable growth and the green transition in the Global South.
