SO the Commonwealth Development Corporation (CDC) Group plc has put in bid to take over majority shareholding in the Copperbelt Energy Corporation, which is one of the best Zambian companies that has even listed on a stock exchange.
We find this news exciting because we all know that the energy sector is one very key sector to the success of any economy and any deficit has far-reaching consequences.
Not too long ago, Zambia was experiencing unprecedented load-shedding that made for an unpleasant situation both in homes and various economic sectors like manufacturing and more especially the mines.
Zambia, it must be said, has stalled in its efforts to reach one million tonnes of copper production per year partly because of the deficit the country experienced in the energy sector.
As a result, there was a huge call by government asking the private sector to join in in the power generation in order to meet not just Zambia’s demand but that of the Southern African region.
New technologies came in that boosted power generation at various already existing power stations like Kariba which saw a rise of about 20 per cent and with the addition of two more power stations, Kariba was giving Zambia 1080 megawatts (MW) of power.
Other smaller stations like Musonda Falls, Kalungwishi and Lunzhua among the many dotted across the country got a boost but one thing that has not been mentioned in all this is the capital intensity of such projects.
CEC, which is the leader of power supplying to the Mines in Zambia has suffered greatly in this time and as a way to mitigate the challenge, opted to join in the power generation sector with the Kabompo hydro-power station.
Though small at time of initial feasibility study of about 40 mw, it was a key step to helping zambia meet its power demand and deficit.
The initial cost of about US$210m soon turned into an excess of $400m project and left the local energy company looking for funds to finance this project.
So when news filters through that a company as big as the CDC, which is listed on the London Stock Exchange (LSE), is interested in not just getting a portion of CEC but majority shares, speaks volumes of the levels of importance of the sector and faith in the Zambian economy.
Special Assistant to the president for Press and Public Relations Amos Chanda confirmed yesterday that CDC had made a bid for CEC and promised a capital injection of $380 million.
That amount will definitely get the Kabompo gorge running and also get to benefit the country as the power will be fed into the Zesco power grid to supply other parts of the country like North-Western and Luapula Provinces as well as the Democratic republic of Congo which are booming with increased mining activities.
Zambia’s mining sector continues to grow and the demand for power can never been underestimated. So the coming in of such funds is always welcome as it, in the end, benefits the country.
CDC head of Infrastructure Sameh Shenouda has posted on Group websitethat CDC’s bid for CEC would increase both renewable power generation in Zambia and spur the growth of regional power trading.
“CEC is one of Zambia’s leading companies but we believe it has muchmore to offer. Under CDC, it is planned that CEC will bring an additional 150 Mega Watts (MW) of renewablegeneration to the Zambian network and increase the amount ofmuch-needed power available.
With the call for greener energy, such investment can only be applauded and encouraged.