CEC Renewables Limited, a subsidiary of the Copperbelt Energy Corporation (CEC Plc), has raised US$96.728 million through issuance of the second tranche of its green bond. The Zambia-based utility intends to use the funds to build a 136 MW solar plant to supply power to its mining clients in Zambia and DRC.
The first tranche of the green bond was issued in December 2023, and it raised US$53.538 million. CEC revealed that the second tranche of the green bond which it issued on 5 December 2024 had an oversubscription rate of 230%.
The green bond issuance is part of the US$200 million Medium-Term Note Programme (MTNP) that was structured by the Emerging Africa & Asia Infrastructure Fund (EAAIF) and Cyngum capital. Combined, the total issuance under the programme raised US$150.266 million. The issuances will help CEC increase its total solar generation capacity to 230 MW in Zambia.
The Emerging Africa & Asia Infrastructure Fund (EAAIF), a Private Infrastructure Development Group (PIDG) company, managed by Ninety One, committed US$18.9 million to CEC’s second tranche green bond issuance.
“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,” said Thanzi Ramukosi, Investment Specialist, Ninety One, the fund manager of EAAIF.
Green bond to help ease energy crisis in Zambia
Cygnum Capital acted as the lead arrangers for the second tranche of CEC’s green bond, with Stanbic Bank Zambia as lead manager and underwriters and other bond holders, including ZCCM-IH, ALCB and the Dutch Entrepreneurial Development Bank (FMO).
“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,” said James Doree, Managing Director, Cygnum Capital.
Zambia is currently facing an energy crisis as a result of climate change-induced drought that has affected the country’s hydropower intensive power generation system. Hydropower accounts for 80% of the country’s electricity generation capacity. CEC will supply some of its excess power to Zambia’s utility ZESCO to ease the energy supply shortage in the country.
The Executive Head of Investment Banking at Stanbic, Mwila Pascal, weighed in saying; “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.”
