FMO Backs Solarcentury Africa With $80 Million To Expand Solar Power Across Southern Africa

The Dutch Entrepreneurial Development Bank (FMO) is in the final stages of providing an $80 million financing package to Solarcentury Africa Limited to support the expansion of solar energy projects in Zambia, Namibia, and Botswana. The investment is expected to strengthen renewable energy generation in Southern Africa and improve regional energy security.

The financing package is designed to support a new approach to renewable energy development in the region. Unlike traditional power projects that depend on long-term government-backed agreements, this initiative is based on a merchant solar model. Under this structure, Solarcentury Africa will be able to sell electricity directly into the regional power market through the Southern African Power Pool. This system enables electricity to be traded across borders and allows power to reach areas where demand is highest.

The total funding package is divided into two equal portions. The first $40 million is a committed facility that will be used to refinance existing operational solar projects. These include the 25 MWp Mailo Solar Plant in Zambia and the 19.3 MWp Gerus Solar Farm in Namibia. Both facilities are already generating renewable electricity and contributing power to the regional grid.

The remaining $40 million is an uncommitted facility intended to support future expansion plans. The funding will help advance the development of the proposed 113 MW Lotsane Solar Plant in Botswana, which is expected to increase renewable energy capacity in the region once completed.

The investment comes at an important time for Southern Africa, where electricity supply challenges continue to affect economic growth and development. Zambia, in particular, relies heavily on hydropower generation. Extended periods of drought linked to climate change have reduced water levels at hydropower facilities, leading to electricity shortages. Increasing solar energy capacity will help diversify the country’s power mix and reduce dependence on a single energy source.

FMO has assigned its highest sustainability ratings to the investment, classifying it as 100% Green and 100% Reducing Inequality. According to the bank, around 90% of the electricity generated through the immediately funded projects is expected to be supplied to Zambia’s electricity grid. This is expected to improve electricity availability while supporting the country’s transition toward cleaner energy sources.

The financing agreement highlights the growing role of private investment in renewable energy development and demonstrates how regional power trading can help strengthen energy infrastructure across Southern Africa.