29th December 2023, Lusaka – Subsequent to the First Green Bond registration announcement at the COP 28 on 5 December 2023 in Dubai, The Copperbelt Energy Corporation PLC (CEC) is delighted to announce that the first tranche subscription towards the US$200 million green bond programme was oversubscribed by over 178 percent. The first tranche of US$ 53.5 million, issued as a private placement, to a select few investors closed on 28 December 2023.
The investors in the Green Bond include Emerging Africa Investment Fund who acted as the Cornerstone Investor and others were ABSA Bank, Atlas Mara Bank Zambia and the African Local Currency Bond (ALCB) Fund.
Announcing the subscription allotment, CEC Managing Director, and Chief Executive Officer Owen Silavwe said “the response from a wide spectrum of investors has been extremely positive and encouraging. We are thankful to our partners for the support and hard work exhibited during the entire Green Bond process. The financing raised through the Green Bond allows us to continue to finance the renewable energy development aligned to our strategy. We remain keen on actualising our green energy ambitions and the issuance of this Bond is an affirmation of our commitment to achieving our flagship 200 megawatt (MW) of solar energy. We look forward to subsequent tranche subscriptions which should provide an opportunity for a diversified investor class to participate in a green and tradable instrument.”
James Doree, Head of Corporate Investment Banking at Cygnum Capital, the Bond’s lead arrangers, said, “we are committed to finding capital markets solutions for infrastructure and clean energy investment. This transaction, Zambia’s first non-recourse project bond and the first to be issued locally under the ICMA Green Bond Principles, demonstrates CEC’s leadership and impact, while also providing it with a flexible and scalable structure to roll out their renewables pipeline.”
Also commenting on the transaction, Paromita Chatterjee, Investment Director at Ninety-One, Fund Manager of the Emerging Africa Infrastructure Fund, said, “the willingness of a local and regional capital market to back an entirely new funding instrument highlights Zambia’s commitment to sustainably advancing its energy market. We are delighted to partner with CEC and act as the cornerstone investor, increasing investor confidence in a rapidly evolving sector.”
Theuns Ehlers, Head of Project Finance at Absa Group said, “this is an ingenious financing solution for Zambia and having a sponsor with strong operational and financial capabilities has helped the structuring and bankability of a private-to-private project finance bond raise, therefore, we are very proud to be associated with this transaction.”
Bobbline H Cheembela, Atlas Mara Bank Zambia, Acting Managing Director said, “the Bank is delighted to be part of the first Green bond issuance in Zambia, which is expected to catalyse further green finance in Zambia’s energy sector”. Mr. Cheembela also praised the Government of the Republic of Zambia for introducing various incentives to support Green Bond financing such as exemption from withholding tax. He further stressed that these incentives, have enabled participation of both local and international investors and will assist in developing the Zambian debt capital markets and the inflow of hard currency into the country that will in part support the sovereign debt restructuring. He concluded by saying, “we trust the CEC Renewables strategy will add to the power supply of the country.”
The proceeds from the Bond, will be deployed towards further solar generation investments and associated transmission infrastructure. CEC’s commitment to attaining its green energy generation ambitions of 200MW of solar energy generation is slowly being materialised. At present, it has an operational 34 MW solar plant, and under construction is a 60MW solar plant, targeted for commissioning in the first quarter of 2024.
The successful issuance of the first Green Bond is not only a pivotal moment for the CEC Group, but for Zambia and its capital markets, marking a clear demonstration of alternative financing options for the much-required diversification of energy sources in the country.
For more information, contact:
Verona Mwila Nkolola
Head Corporate Communications and Investor Relations
About CEC Plc
Copperbelt Energy Corporation Plc (CEC) is a Zambian power generation, transmission, distribution, and supply company, operating in the Copperbelt Province of Zambia and the Katanga region of the Democratic Republic of Congo (DRC). CEC operates in the DRC market through its subsidiary, CEC-DRC SARL.
CEC is a major supplier of power to the mining industry in the region and is a member of the Southern African Power Pool, a pioneering international power trader in Southern Africa the company is publicly traded on the Lusaka Securities Exchange with more than 5,000 investors. It is the first locally listed company to achieve market capitalization ZMK 11 billion.
About CEC Renewables
CEC-R was incorporated in October 2022 as a renewable energy growth platform with the ability to be scaled up with the deployment of renewable energy on the Zambian grid. CEC-R is a 100% subsidiary of CEC PLC mandated to develop renewable assets. The company has in operation the Riverside solar PV plant (34MW) and currently under construction is its 60 MW Itimpi solar PV plant scheduled for commissioning in early 2024.
Press Release – Over Subscription of First Tranche of Green Bond.pdf