EAAIF backs CEC Renewables’ USD 96.7 million green bond to increase Zambia’s solar capacity and tackle the country’s energy crisis
- 136 MW solar plant will provide clean energy to communities and businesses in Zambia,
helping to overcome the country’s energy crisis - The transaction demonstrates EAAIF’s commitment to support capital market development
in Africa, providing fundraising solutions for dynamic companies
Lusaka, 13 December 2024: The Emerging Africa & Asia Infrastructure Fund (EAAIF), a Private
Infrastructure Development Group (PIDG) company, managed by Ninety One, has committed USD
18.9 million to Copperbelt Energy Corporation (CEC Plc) subsidiary, CEC Renewables’ USD 96.7
million green bond to develop a 136 MW solar plant in Zambia.
The issuance is part of a broader USD 200 million medium-term note programme that was
structured by EAAIF and Cyngum capital in 2023, which also resulted in the USD 53.5 million
issuance of Zambia’s first green bond last year. That issuance opened the way to local and regional
private investors, resulting in the USD 96.7 million second tranche which was facilitated by Cygnum
Capital, acting as lead arrangers, with Stanbic Bank Zambia as lead manager and underwriters and
other bond holders, including ZCCM-IH, ALCB and the Dutch Entrepreneurial Development Bank
(FMO). The combined issuances will support CEC Renewables to increase its total solar generation
capacity to 230 MW in Zambia, which it will sell to local businesses and ZESCO, the energy utility in
Zambia.
The transaction supports climate mitigation aims with 136 MW of solar power saving equivalent to
126,000 tCO2e. CEC estimates that over 800 jobs will be created with this project. From the power
sold to ZESCO, it is estimated that 146,000 end-users will benefit from improved quality of
electricity supply.
The commitment comes at a critical time as Zambia faces an energy crisis stemming from its heavy
dependence on hydropower, which accounts for over 80 per cent of the country’s electricity
generation1. Frequent droughts, exacerbated by climate change, have significantly reduced water
levels in major reservoirs such as the Kariba Dam, leading to a substantial shortfall in power supply.
As a result, the country has faced extensive load-shedding, with power outages lasting up to 12
hours a day, severely impacting industries, businesses, and households.
Thanzi Ramukosi, Investment Specialist, Ninety One, the fund manager of EAAIF said, “Our
continued support for CEC Renewables through the green bond is testament to our commitment to
develop Africa’s capital markets, providing funding solutions to dynamic companies that will drive innovation
and growth within key sectors. The renewable energy that will be provided to Zambia as
a result of this issuance will help improve the lives of communities and local businesses who are
currently facing an energy crisis”.
The crisis has constrained economic growth, particularly in energy-intensive sectors like mining,
which is the backbone of Zambia’s economy. Limited energy supply has also hindered the expansion
of small and medium-sized enterprises (SMEs), increasing unemployment and economic instability.
The 136 MW Itimpi solar PV plant will contribute to overcoming these challenges, providing a vital
power source to lessen the impact of the energy crisis.
The investment aligns with PIDG’s commitment to provide green finance to underserved sectors in
emerging economies, developing critical infrastructure that will support economic growth and the
transition to low carbon societies.
James Doree, Managing Director, Cygnum Capital thanked EAAIF for its continued collaboration,
“We have now worked with EAAIF on several bond transactions, recognising their commitment to
capital market development. They played a crucial role in establishing the programme and the
success of tranche 1, which has paved the way for a larger, oversubscribed and commercially
underwritten tranche 2.”
Mwila Pascal, Executive Head of Investment Banking at Stanbic, said, “Stanbic Bank Zambia, a
member of the Standard Bank Group, is proud to have acted as Lead Manager and Underwriter to
the CEC Renewables tranche 2 issuance. This is not only a key transaction for CEC Renewables and
the capital markets in Zambia, but it’s also a strategic development towards Zambia’s energy
transition that boosts resilience by diversifying the country’s energy mix.”