Copperbelt Energy Corporation Ignites Green Revolution With Zambia’s First $200 Million Green Bond

In a groundbreaking announcement during the COP 28 Climate Summit in Dubai, Zambia’s Copperbelt Energy Corporation Plc (CEC) revealed the successful registration of its $200 million Green Bond with the Securities and Exchange Commission. This marks a historic moment for Zambia’s capital markets, ushering in the country’s first green financial instrument and signalling a potential influx of green finance.

Speaking at the summit’s Energy Day, CEC’s Managing Director and CEO, Mr Owen Silavwe, expressed delight in unveiling the US$200 million Green Bond, structured as a program. The proceeds from this initiative aim to expedite CEC’s ambition to generate a minimum of 200MW of renewable energy, focusing particularly on solar energy, with potential storage implementations.

Honourable Engineer Collins Nzovu, Minister of Green Economy and Environment, highlighted Zambia’s Green Growth strategy, an integral part of the nation’s aspiration to achieve middle-income status by 2023. The strategy emphasizes resource efficiency, low carbon footprint, climate resilience, and social inclusivity in the pursuit of a sustainable development trajectory.

The Zambian Government has established two regulatory frameworks to foster green investments, namely the Green Bonds Framework by the Securities and Exchange Commission (2019) and the Green Loans Framework by the Bank of Zambia. Minister Nzovu commended CEC for successfully registering the country’s inaugural Green Bond, applauding the private sector’s leadership in advancing Zambia’s green energy transition.

The Green Bond program, with an initial tranche of US$54 million, is set to close by the end of the year. Lead arrangers Cygnum Capital, along with cornerstone investors Emerging Africa Investment Fund (EAIF) in partnership with Absa Group, expressed pride in their roles. This milestone demonstrates how a robust sponsor, transparent policy framework, and supportive anchor investors can drive private sector solutions for the green energy transition.

Paromita Chatterjee, representing the Emerging Africa Investment Fund, expressed confidence that this financing avenue will complement traditional options, accelerating the energy transition. Theuns Ehlers, Head of Project Finance at Absa Group, highlighted the importance of a strong sponsor with operational and financial capabilities in structuring and ensuring the bankability of private-to-private project finance.

Nonde Sichilima, Director for Market Supervision and Development at the Securities and Exchange Commission, deemed the Green Bond registration a positive development for Zambia’s capital markets. Anticipating that it will catalyze more green bonds, Sichilima sees it as a means of capital raising for green initiatives, contributing to the deepening of capital in the country.

The Green Bond’s proceeds will be directed toward additional solar generation investments within the CEC Group through CEC Renewables, an investment vehicle dedicated to realizing renewable energy development. Mr Silavwe concluded by reaffirming CEC’s commitment to supporting Zambia’s green energy transition, which commenced five years ago with a focus on solar generation.