CEC announces registration of first green bond

Copperbelt Energy Corporation Plc (CEC) has announced the registration of its green bond with the Securities and Exchange Commission on the sidelines of the COP 28 Climate summit.

The registration of the green bond is a first for the country’s capital markets and is expected to attract more green finance in the country.

Making the announcement during the Climate Summit in Dubai, United Arab Emirates, on Energy Day, CEC Managing Director, and Chief Executive Officer (CEO), Owen Silavwe said: “We are pleased to announce the registration of our US$200 million Green Bond, structured as a programme, whose proceeds will accelerate the actualisation of our ambitions to generate at least 200MW of renewable energy and specifically solar energy with possible storage implementation.”

The Minister of Green Economy and Environment, Engineer Collins Nzovu, speaking at the same function said the government has developed a green growth strategy, which is part of its aspiration to become a prosperous middle-income country by 2023,.

He said the green growth strategy is the country’s blueprint for greening the economy and the environment by deliberately pursuing a development trajectory that is resource efficient, low carbon, climate resilient and socially inclusive.

Nzovu added that the government has put in place two regulatory frames that are being leveraged to raise green investments, these being the green bonds framework issued by the Securities and Exchange Commission in 2019 and the Green Loans Framework issued by the central bank.

The Minister congratulated CEC for successfully registering the country’s debut green bond, further commending the private sector’s leadership in showcasing the country’s prowess in the green energy transition.

The US$200 million bond programme has its first tranche of US$54 million, closing by the end of the year.

The lead arrangers of the Green Bond are Cygnum Capital, with Emerging Africa Investment Fund (EAIF), as cornerstone investors in partnership with Absa Group.

“We are proud to have been the lead arrangers for CEC’s Green Bond”, Cygnum Capital representative, James Doree said. “It demonstrates how the combination of a strong sponsor, a transparent policy framework and supportive anchor investor can drive private sector solutions to the green energy transition.”

“We are thrilled to be the cornerstone investor to the first Zambian green bond programme,” said Paromita Chatterjee, representative of the Emerging Africa Investment Fund, a Private Infrastructure Development Group (PIDG) company).

He added that he is confident that this avenue of financing will complement the traditional financing options to fast-track energy transition.

“Our partnership with the sponsor has made it possible to actualise the ingenious financing,” said Theuns Ehlers, Head of Project Finance at Absa Group. “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.”

Adding to the conversation, the Securities and Exchange Commission Director for Market Supervision and Development, Nonde Sichilima said, “The announcement of the registration of the Green Bond is a positive development for our capital markets. We anticipate that it will catalyse the listing of more green bonds as a means of capital raising for green initiatives and contribute towards deepening capital in our country.”

The proceeds from the bond will be deployed towards further solar generation investments within the CEC Group through CEC Renewables. CEC Renewables is an investment vehicle established by the CEC Group, through which renewable energy development is actualised.

“We began our renewable energy journey, particularly in solar generation five years ago and our announcement today is an affirmation of our commitment to support Zambia’s green energy transition,” said Silavwe.

The bond will open and close within December 2023.

By: Gary Kakompe

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