In a significant move to combat a deepening energy crisis, Zambia is advancing its renewable energy ambitions through a heavily oversubscribed $96.7 million green bond. Issued by CEC Renewables, the subsidiary of Copperbelt Energy Corporation (CEC), the funds will finance the construction of a new 136 MW solar power plant. The successful issuance saw robust investor confidence, with the Emerging Africa & Asia Infrastructure Fund (EAAIF) anchoring the deal with a substantial commitment.
Capitalizing on Solar After EAAIF Backs $96.7M Green Bond for Zambia’s Solar Plant
Zambia’s over-reliance on hydropower, which constitutes over 80% of its electricity supply, has left its economy vulnerable to climate change-induced droughts that cripple key reservoirs like the Kariba Dam. The resulting power shortages, with daily outages lasting up to 12 hours, have severely impacted industries and households. This new 136 MW Itimpi solar PV facility is a direct response to this challenge, aiming to provide a stable, alternative power source.
Once operational, the plant will increase CEC Renewables’ total solar generation capacity to 230 MW. The clean energy generated will be sold to ZESCO, the national utility, and other local businesses, benefiting an estimated 146,000 end-users. Beyond enhancing grid stability, the project is projected to create over 800 jobs and displace approximately 126,000 tons of carbon dioxide equivalent (tCO2e) annually.
A Landmark for Green Finance After EAAIF Backs $96.7M Green Bond for Zambia’s Solar Plant
This $96.7 million bond represents the second tranche of a larger $200 million medium-term note program structured in 2023 by EAAIF and Cygnum Capital. The program’s initial $53.5 million tranche successfully opened the door for private investment in Zambia’s green economy. This latest offering was met with even greater enthusiasm, attracting a diverse group of investors and demonstrating the growing appetite for sustainable investments in the region.
Managed by Ninety One, EAAIF committed $18.9 million to the bond. Cygnum Capital acted as lead arranger, with Stanbic Bank Zambia serving as lead manager and underwriter. Other key participants include ZCCM-IH, the ALCB Fund, and the Dutch Entrepreneurial Development Bank (FMO). Mwila Pascal, Executive Head of Investment Banking at Stanbic, described the issuance as a “strategic development for the nation,” emphasizing its role in diversifying Zambia’s energy mix.
Driving Infrastructure Forward: EAAIF Backs $96.7M Green Bond for Zambia’s Solar Plant
The success of this green financing initiative underscores the vital role of capital markets in developing critical infrastructure. The partnership between institutional investors and local financial experts has created a powerful framework for Zambia’s transition to sustainable solar energy.
“Our support for CEC Renewables through the green bond reflects our dedication to developing Africa’s capital markets and funding dynamic companies driving growth and innovation,” stated Thanzi Ramukosi, an investment specialist at Ninety One. He added, “The renewable energy generated will improve the lives of communities and businesses facing the energy crisis.”
Echoing this sentiment, James Doree, Managing Director of Cygnum Capital, thanked EAAIF for its commitment, noting their partnership was “crucial to the success of tranche 1, paving the way for this larger, oversubscribed tranche 2.” This collaborative effort not only addresses immediate power shortages but also strengthens Zambia’s long-term economic resilience and commitment to global climate goals.
Sources
- EAAIF Commits 20% of $100Million Green Bond for Zambia’s Solar …
- EAIF CEC PR.docx – TXF
- CEC Issues $97M Green Bond for Solar Expansion in Zambia
- Green Bonds Usher in a New Era for African Energy Finance
- CEC raises $97M via Green Bond for 136MW solar plant in Zambia
- One year after the first, CEC Renewables announces issuance of its …
- EAAIF backs CEC Renewables’ USD 96.7 million green bond to …
- London-based EAAIF pledges $19mn to help build 136MW solar …
