Exclusive interview with Cathy Oxby, Co-Founder and Chief Commercial Officer of Africa GreenCo. She is also an advisory board member for the upcoming Africa’s Green Economy Summit, taking place 19–21 February 2025.
Let’s start with some background about yourself and your role at Africa GreenCo.
I trained in project finance at Allen & Overy before moving into a commercial role as an investment director at an infrastructure fund where I worked on their first renewables deals. I then went freelance for a while, working across the project lifecycle and having my first taste of development finance. I was born in Nigeria and have always had a keen interest in emerging markets and a soft spot for Africa in particular. I met up with GreenCo’s CEO, Ana Hajduka, who I knew from Allen & Overy, socially one day in the summer of 2015, when she had just secured the first grant from The Rockefeller Foundation for the GreenCo feasibility study, and the rest, as they say, is history.
What were the challenges in the energy industry that led to Africa GreenCo’s founding?
Traditionally, if a developer built a solar farm, it would sell all of the power generated under a long term—usually 25 years—arrangement with the national utility, but unfortunately most utilities in the region are financially challenged. Recognition that the lack of creditworthy long-term purchasers of power was the key impediment to financing new renewable energy generation in Africa triggered the birth of GreenCo. Development finance efforts were focussed on supporting individual bilateral projects and did not fully reflect the context of the huge power demands in the region, the fungibility of electrons and an interconnected regional grid. We therefore proposed it would be more efficient for development finance funds to be deployed to capitalise a creditworthy intermediary who could support project finance at project level and shift the burden away from utilities and sovereigns. Many of the countries in the region in which we work are at, or fast approaching, their IMF debt sustainability caps.
Can you explain in a few words what Africa GreenCo does?
GreenCo is a renewable energy trader and service provider, headquartered in Lusaka and licenced to trade electricity in Zambia, Zimbabwe, Namibia and, hopefully very soon, South Africa. We buy renewable energy from a portfolio of generators and take risk on our ability to sell that power profitably to a portfolio of consumers and through the markets of the Southern African Power Pool (SAPP), of which we were the first member to join under the Market Participant category, and we are still the only active non-asset owning trader. Our skilled trading team trades on the markets every day using our bespoke market-leading energy trading and risk management system. We also use our skills and relationships to design and implement other power transactions. For example, we are currently importing power into Zambia for First Quantum Minerals to help address the dire shortage of power in Zambia due to the lowest water levels in Lake Kariba hydro reservoir for 20 years.
The regional approach is key to the GreenCo model, enabling us to efficiently draw on different renewable energy sources across the region and mitigating the potential political risk of having all electrical eggs in one sovereign basket.
Our primary goal is to facilitate investment in new renewable energy generation capacity to alleviate energy poverty and drive economic growth, while minimising the financial impact on the states.
What have been some of your winning strategies?
Close cooperation with national governments, utilities and regulators has been absolutely key. The energy sectors are evolving rapidly, and while there is a recognition that public funds are insufficient to meet the huge financing needs, regulatory changes need to be done in a context-sensitive way that strikes the right balance between public and private interests and achieves appropriate risk allocation. We have always taken a top down and bottom up approach which has enabled us to survive political changes in administration. By ensuring the technocrats were on board and understood the benefits of the GreenCo model, they were able to brief the incoming new ministers.
We have had to be flexible and creative. Most of what we do is first of a kind. The broader energy sector is also evolving—broadly in line with what we have been advocating, which is gratifying to see. We have worked closely with regulators to agree licence conditions that are appropriate for non-asset owning traders and can act as template for the next wave of traders.
Third-party access arrangements governing access to the grid are also key and new to the region. We have maintained an open dialogue with the utilities to achieve appropriate risk allocation and ensure the utilities paid fairly for the services they provide. We all need the utilities to be long-term sustainable—their revenue streams are shifting from the traditional vertically integrated supply chain towards monetising the network and the operation of the system, which are naturally monopolistic.
Which achievements along the way have been most pivotal or are you most proud of?
Good question. There have been many milestones along the way but a few stand out.
The first is probably the issuance of our Zambian trading licence. It was the first electricity trading licence to be issued in Zambia. The role of trader in the Zambian market was expressly introduced in the Electricity Act and Energy Regulation Act of 2019, which we had provided input on, and it was our first licence in the region.
That was closely followed by our SAPP membership, which, as I mentioned, was the first under the Market Participant category. To be admitted as a member, we secured the unanimous support of all SAPP members, including all national utilities in the region. Formally, from submission of our membership application to being admitted took 37 days… plus 5 years of engagement prior to that to get the stakeholders comfortable with how we intended to operate, including presenting at several annual meetings of SAPP. Actually starting trading on SAPP was also a very special moment.
Other key achievements relate to the financing of GreenCo. To act as a creditworthy offtaker we need to have a strong balance sheet. We’ve worked very closely with the development finance community in order to achieve that. The first approval came from the European Commission under the European Fund for Sustainable Development. We worked with Agence Francais de Development, the French development bank, on this and these approvals provided a clear validation of the GreenCo approach and gave a lot of credibility that assisted in subsequent fundraising.
Next was the equity Investment by InfraCo and IFU, the Danish development bank, in Oct 2020. This was the first step to weaning us off grant funding and recognised the commercial potential of the GreenCo business. InfraCo and IFU continue to be our equity investors, and we are absolutely delighted to still be working with them and grateful for their trust and shared vision that they showed.
Reaching break-even earlier this year was a great milestone, and a relief! We needed to put a lot of strong foundations in place first on the regulatory side, and it is very rewarding to see that paying off.
Finally, I can’t forget to mention the GreenCo team. It is fantastic to see how the GreenCo team has grown in size and depth. We have a really fantastic group of smart, dynamic individuals, mainly based on Lusaka but with satellite offices in our other countries of operation.
What are some of the main challenges that you have faced in building the business?
It has been a long journey. It was disappointing how few DFIs were willing to commit a relatively small amount to prove the GreenCo concept. It is much easier to get funding for technical assistance than to test a new, innovative, impactful and scalable business model.
But we persevered and IFU and InfraCo shared our vision and here we are today. We are also about to launch a capital raise, and, in parallel, we are putting in place debt and guarantee facilities to leverage the equity and enable us to support more new projects.
Speed. Everything takes longer than planned, which also impacts on costs. Time equals money. After Covid and the widespread changes in personnel following the change of government in Zambia in 2021, things took longer than planned, but this meant that we focussed more attention on the other countries in the region, and that got us where we are today, fully licenced in three countries and, as I said, hopefully soon in South Africa too.
What have been some of the best lessons so far?
Passion, patience and perseverance. Our goal has always been to create a long-term sustainable business that supports and is fully integrated in the local energy ecosystem. Energy is an emotive and often politically charged topic, so we have invested a lot of time and energy in explaining what we do and what the benefits are. We have also provided input into regulatory adjustments in a number of countries to help ensure transparent and non-discriminatory access to the grid and create a conducive investment environment.
What excites you about the opportunities that the green economy can have for Africa?
There is so much potential in the green economy, but in the words of President Akinwumi Adesina of the African Development Bank Group: “The potential is undeniable, but nobody eats potential… We have to unlock that potential.”
Energy is the engine of growth and Africa has abundant natural energy resources. It is also home to the majority of the metals and critical minerals needed for the global energy transition and a young and growing labour force. This is a winning formula if harnessed in an equitable and sustainable way. We see policies and laws being enacted to ensure that first stage processing of mineral ore takes place in country, resulting in value creation locally and reducing the carbon footprint of exporting such enormous volumes of raw materials. Huge investment is needed in these supply chains and that creates a lot of opportunity to create local industry and jobs.
We see an increasing recognition of the need to work together. The African Continental Free Trade Agreement and the African Union’s vision for a single electricity market are some examples. Looking at the regions, and I’m clearly most familiar with the energy sector, alongside the continuing development of SAPP, including the planned introduction of financial and ancillary service markets, we see the West African Power Pool about to commence trading on their day-ahead market that was recently introduced, and the East African Power Pool has also announced an intention to begin power auctions before the end of this year.
You are a member of the AGES advisory board. How important is such an event for the continent?
One of the things I like most about AGES is that it looks at the bigger picture of the different elements of the green and blue economies and how they interact and intersect. We can sometimes get lost in our own little bubble, but there are important lessons to be learned from other sectors of the green economy. AGES provides a forum for these to be shared.
The format of AGES is also designed to facilitate active debate and exchanges of information and ideas. Not just panels of experts speaking at the audience. I also really like the platform given to the youth and entrepreneurs to pitch their projects and ideas.
August is Women’s Month in South Africa, but we celebrate women all over the continent. Do you have a message about the role of women in the energy transition?
GreenCo is proud to be a women-led business with solid representation of women in all levels of the team. There are also a number of very impressive and prominent women within the stakeholders we work with.
While I also enjoy working with men and appreciate their more characteristic directness (which I share), having a diverse workforce and recognising and valuing different working styles and approaches to problem solving is essential and generally drives the best outcomes.
Anything you would like to add?
Really just to encourage people to attend AGES. It promises to be a stimulating event and I look forward to meeting many new and interesting people there as we try to find the best ways to work together to achieve our common goals and ensure that Africa’s green economy flourishes.
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