Axian Energy signs power purchase agreement

Axian Energy has signed a power purchase agreement (PPA) with Africa GreenCo for its future photovoltaic power plant Kudu, which is currently being developed in Zambia. This agreement outlines the terms for Africa GreenCo to purchase the electricity generated by the plant once it becomes operational.

Kudu project's power capacity

The Kudu project plans to deploy a capacity of 240 MWc, with 200 MW effective in alternating current. This capacity is expected to significantly contribute to Zambia's renewable energy supply and support regional power needs through interconnected networks.

Indirect sales approach

Rather than entering into a direct contract with the national electricity company or an industrial firm, Axian Energy is relying on Africa GreenCo as an intermediary buyer responsible for reselling the negotiated electricity. This approach allows the project to access markets beyond Zambia through the interconnected markets of the Southern African Power Pool.

Commercial risk transfer

This approach also entrusts the management of commercial risk to Africa GreenCo, which is responsible for finding buyers for the electricity. This arrangement shifts the burden of securing long-term buyers from Axian Energy to Africa GreenCo, potentially reducing Axian's exposure to market fluctuations.

Financial support from Standard Bank

Standard Bank and its subsidiary Stanbic Bank Zambia are supporting the financial structuring and preparation of the project, though the level of their financial contribution has not been specified. Their involvement suggests confidence in the project's viability and potential for growth in the region.

PPA announced at Energy Forum for Africa

The signing of the PPA was announced in October at the Energy Forum for Africa in Lusaka and represents a step toward the realization of the project. This development highlights Zambia's growing focus on renewable energy and international collaboration in the sector.