CEC 2023 AGM Management Presentation

Business Environment Highlights

Power Situation in Zambia

• 2022 witnessed the shortest-lived load curtailment program in the recent past when the Kariba power station experienced reduced water levels; the lowest in years
• While Zambia is presently back in balance between supply and demand, low hydrology events, based on how much water will be received in 2022/23 rainy season and overall water management, could potentially change the picture

Zambian Regulatory Environment
Market redesign and open access work are in progress with the expectation that the work will be iterative, seeking to incorporate lessons from other countries as well as Zambia’s specific situation. CEC will continue to actively participate in processes and collaborate with other sector players to ensure equitable outcomes.

Regional Power Situation
At regional level, supply side challenges continue, particularly in light of the situation in South Africa. This remains a threat to the regional power balance.

Financial Performance

Revenue and Profitability:

• Revenue: USD374 million (2021: USD 342 million)
• EBITDA: USD93 million (2021: USD94 million)
• Profit After Tax: USD51 million (2021: USD51 million)

Shareholder Returns:

• Dividends Paid: USD50 million (2021: USD37 million)
• Earnings per Share: USD0.031 (2021: USD0.031)

Priority Areas

• Enhancing Customer Proposition – Efficiently delivering to our customers safe, reliable & affordable power through continued upgrading, modernizing & investing in new transmission & distribution infrastructure including interconnectors where they are required
• Unlocking the KCM Debt – Finding a solution to the long outstanding KCM debt and ensuring that appropriate agreements are put in place to underpin service provision remains a priority for the business
• Embedding Sustainability – Placing sustainability at the center of our operations & business culture entails that we make ESG a regular topic in all our conversations & engagements with our stakeholders
• Expanding Our Green Footprint – Commissioning the Itimpi solar project & concluding the the related refinancing process which will unlock further funding for more renewable energy projects
• Strengthening Our Supply Portfolio – We will focus on initiatives aimed at strengthening our supply portfolio to enable us to reliably and affordably meet the growing power demand. This will go hand-in-hand with augmenting the delivery infrastructure

Repositioning Our Portfolio

CEC DRC

• Our DRC subsidiary is now fully licenced to supply power in the DRC, having secured:
  • A commercialisation licence
  • An import licence
• So far, CEC DRC has focussed more on marketing activities
• In the coming years, it will be instrumental in our power trading strategy in that market – signing offtake, wheeling and supply agreements

CEC Renewables

• We incorporated a new subsidiary called CEC Renewables to lead our foray into the renewable energy space
• Through shareholder loans provided by the parent company, CEC Renewables has two projects under its belt so far:
  • The 33MW Riverside solar project, commissioned post the reporting date, bringing the Company’s solar generation capacity to 34MW
  • The 60MW Itimpi solar project is currently under construction with commissioning targeted for end of year
• We are enhancing our role in the transition to a cleaner energy future as we integrate renewables into our supply portfolio

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CEC 2023 AGM Management Presentation.pdf