CEC Renewables, a subsidiary of Copperbelt Energy Corporation (CEC), has issued a new tranche of green bonds for an amount of USD 96.7 million. This operation aims to finance the second phase of construction of the Itimpi photovoltaic solar power plant in Zambia. The plant, once this phase is completed, will see its capacity increase from 100 MW to 236 MW.
This fundraising was structured by Cygnum Capital as lead arranger, while Stanbic Bank Zambia acted as lead manager and underwriter. Among the investors who have subscribed to this bond are renowned financial institutions, such as FMO, the Dutch development bank.
A context of energy diversification
Zambia, whose electricity production depends mainly on hydroelectricity (83% according to the Ministry of Energy), is facing increased pressure to diversify its energy sources. Recent droughts have weakened the production capacities of dams, exposing the country to supply deficits.
In 2024, Zambia’s installed energy capacity stands at 3356.6 MW. In addition to hydropower, the energy mix includes coal (9%), heavy fuel oil (5%) and solar energy (3%). In this context, the Itimpi project is part of a logic of adaptation to the energy market, without upsetting its general balance.
The issuance of this bond builds on a growing demand for “green” securities in the financial markets, offering CEC an opportunity to capture liquidity while meeting the expectations of specialized investors.
A rational expansion strategy
The second tranche of financing comes one year after a first bond raising in 2023, making it possible to lay the foundations of the Itimpi project. This step-by-step approach illustrates prudent risk management, in line with the macroeconomic and climatic uncertainties affecting the region.
Mr. Owen Silavwe, Managing Director of CEC, said that this operation is a continuation of their strategic plan, without referring to explicitly environmental or social objectives. This initiative reflects more of a response to the structural constraints of the Zambian electricity network than an ideological positioning on renewable energies.
Green bonds, while meeting defined criteria for the award of this label, remain above all a financial instrument allowing capital to be mobilized for identified projects. They attract diversified investors looking for stable returns in a still volatile rate environment.
