CEC Africa – a pan-African power assets developer
CEC’s corporate development team is focused on identifying and developing projects, both in Zambia and in Sub-Saharan Africa, that will lead to income diversification and sustainable long term earnings growth for the Group.
CEC Africa was established by CEC to develop, finance and operate power projects across sub-Saharan Africa, covering distribution, transmission, thermal generation, hydro and renewable energy. The Company is currently a wholly owned subsidiary of CEC, although a process has been commenced to invite investment into CEC Africa from third parties including Development Banks, Private Equity Funds and Infrastructure Funds. CEC Africa has a strong pipeline of power projects in development across Africa, including projects in Namibia, Sierra Leone, Zambia and Nigeria. CEC Africa is incorporated in Mauritius.
The principal activity of CEC Africa is to operate as an investment holding company. Its primary focus is to develop and operate power projects in Sub-Saharan Africa, covering the full value chain in the power sector – Distribution, Transmission, Generation (both hydro and thermal) and renewable energy. The Company will consider investment in projects at different stages of development, ranging from greenfield generation projects to the acquisition of operating assets that may be available for sale through privatization or sale by private equity investors.
CEC Africa intends to support the project development activities of its parent, company CEC PLC, in the development of hydro and transmission projects in Zambia. CEC Africa is an active investment company, and seeks to identify projects where it can provide operational and management services and leadership with respect to governance, operational efficiency, selection and training of competent business unit managers and employees and the establishment of policies and procedures with respect to social, safety, health and environmental management that are consistent with international best practice.
Given the highly capital intensive and developmental nature of the power sector in Sub-Saharan Africa, CEC Africa has developed close links with Multi-Lateral Banks and Development Finance Institutions that typically provide the debt required for the development of projects (typically around 70% of the overall project cost). Equally important are relationships with commercial banks active in the African economies in which CEC Africa operates. UBA Plc of Nigeria provided acquisition finance for KANN Utility to acquire Abuja Electricity Distribution Company (AEDC), Zenith Bank of Nigeria provided acquisition finance for North South Power to acquire the Shiroro hydro concession and Standard Bank of South Africa provided bridge finance and advisory services to facilitate the initial capitalization of CEC Africa through shareholder loans from CEC PLC.
At 31st December 2013, CEC Africa had only one shareholder in CEC PLC. However, a process had commenced to identify and negotiate with other investors to subscribe for equity and/or shareholder loans in the company.