By KENNEDY MUPESENI –
THE African Development Bank (AfDB) has approved a US$50 million investment in Copperbelt Energy Corporation Africa Investments Limited (CECA), a multinational power company headquartered in Nigeria and Zambia.
CECA seeks to acquire and develop distribution and transmission assets as well as complementary Greenfield generation projects throughout the sub-Saharan Africa.
AfDB said in a statement that by investing across the energy value chain, generation, transmission, and distribution, CECA aimed to reduce electricity losses while improving the overall economics in Africa’s power sector.
CECA has invested in two operating companies in Nigeria namely the Abuja Electricity Distribution Company and North South Power, which holds a 30-year concession on the 600 megawatts Shiroro Hydro Power Plant, both acquired during the recent Nigerian Power Sector Privatization Programme.
In addition, CECA has a number of Greenfield power projects under active development in Southern and Western Africa, as well as a reserve pipeline spanning Eastern and Central Africa.
The AfDB said through these investments, CECA aimed to become one of Africa’s leading power utilities, thereby catalyzing additional private sector participation in its energy markets.
To deliver on its growth strategy, CECA was targeting a capitalization of US$500 million within the next three to five years.
Thus far, CECA had been capitalized with assets in excess of US$100 million by Copperbelt Energy Corporation (CEC), a publicly-traded private utility with a 50-year history in Zambia and the Democratic Republic of Congo as well as consistent track record of profitability.
A number of other investors had already been identified by CECA and it was expected that a first closing of US$150 million would be reached by the third quarter of 2015.
“Through its investment, the African Development Bank is acting as anchor investor and strategic partner, helping to shape CECA’s policies and strategies, while catalyzing additional private sector funding into Africa’s power sector,” the Bank said.
The operation was aligned with the Bank’s 10 year strategy, as it promoted infrastructure development, regional economic integration, private sector development, governance and accountability, as well as skills and technology development.
“By supporting an indigenous power developer (CECA), the Bank is helping create a pool of pan-African investors besides assisting in mobilizing the necessary capital to increase access to energy in Africa,” AfDB president, Donald Kaberuka said.
CECA represented AfDB’s first equity investment into a power company with interests across Africa.
The investment had been structured as part of direct equity and convertible debt, which demonstrated the ongoing financial innovation undertaken by the AfDB when it came to supporting infrastructure development in Africa.