Copperbelt Energy Corporation (CEC) is issuing Zambia's first green bond. The programme aims to raise $200 million for the production of photovoltaic solar energy.
Zambia is entering the green bond market. The country’s first bond is being issued by CEC Renewables (CECR), a subsidiary of Copperbelt Energy Corporation (CEC), a private energy production, transmission and distribution company listed on the Lusaka Stock Exchange. The $200 million programme was announced on the sidelines of the 28th United Nations Conference of the Parties on Climate Change (COP28) in Dubai, United Arab Emirates (UAE).
The first tranche of $54 million was subscribed by South African bank Absa and the Emerging Africa Investment Fund (EAIF) of the Private Infrastructure Development Group (PIDG). “We are delighted to be the lead investor in Zambia’s first green bond programme,” says Paromita Chatterjee, EAIF’s representative at COP28. This first experience “will catalyse the listing of other green bonds as a means of raising capital for green initiatives, and will help to strengthen capital in our country”, says the Securities and Exchange Commission (SEC).
Towards the diversification of Zambia’s electricity mix
On 2 January 2024, EAIF gave concrete expression to its commitment by announcing a “de facto” subscription of $50 million of the $54 million in green bonds issued under the first tranche. According to the PIDG company, the proceeds from this first tranche will be used to develop two solar photovoltaic power plants with a combined production capacity of almost 100 MW.
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Through this green bond programme, CECR aims to develop an installed solar capacity of 200 MW. This transaction has been announced at a time when Zambia is only just beginning to exploit its solar potential, estimated at 2,300 MW by the American think tank the Atlantic Council. The aim of developing solar power is to diversify the country’s electricity mix, which is 83% dependent on hydroelectric dams (2,393 MW according to Power Africa) to produce its electricity.
Zambia has already embarked on large-scale solar energy production, with a 33 MW solar power plant inaugurated in February 2023 at Kitwe, in the Copperbelt province. The $200 million green bond programme, which has also attracted interest from local investors, is structured by Cygnum Capital, an investment company based in London, UK.
Jean Marie Takouleu
