Malawi: ATI Provides Default Cover for 60MW Salima Solar Project

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  • The African Trade Insurance Agency’s (ATI) Regional Liquidity Support Facility (RLSF) has stepped in to provide cover for the 60MW Salima Solar Power Plant in Malawi.
  • ATI, through the RLSF, is providing liquidity cover for a tenor of up to 10 years.

RLSF encourages investments in renewable energy in ATI member countries through a unique and innovative guarantee product that protects Independent Power Producers (IPPs) against the risk of late payment by national power companies. This is the second project in the country to benefit from RLSF, the first project being Phase 1 of the Nkhotakota Solar Power Plant, with an initial installed capacity of 21 MW.

Salima Solar PV plant is due to start operations in August 2021. It was developed by JCM Matswani Solar Corp Limited, a Malawian Special Purpose Vehicle (SPV) owned by the Canadian Independent Power Producer (IPP) JCM Power and InfraCo Africa Limited; the latter is part of the Private Infrastructure Development Group (PIDG). Construction equity was provided by JCM Power, the Dutch Development Bank FMO, and InfraCo Africa Limited.

This will be the first solar PV in Malawi to connect to the grid. The energy generated, at an estimated annual average of 154 GWh, will be sold exclusively to the Malawian utility, ESCOM, under a 20 year Power Purchase Agreement (PPA). ATI, through RLSF, will provide cover for an amount of USD 4.4 million against the risk of delayed payment by ESCOM; the RLSF policy will be for an initial tenor of up to ten (10) years. The liquidity cover being provided via RLSF will enable up to USD 78 million of total project financing.

Author: Bryan Groenendaal


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