- CEC Renewables raises $96.7 million through a green bond to expand the Itimpi solar plant in Zambia, boosting capacity by 136 MW.
- International investors like FMO and the Dutch Development Bank support the bond, arranged by Cygnum Capital and underwritten by Stanbic Bank Zambia.
- Zambia aims to diversify its energy mix, reducing reliance on hydropower (83%) and addressing supply shortages caused by droughts.
CEC Renewables, a Copperbelt Energy Corporation (CEC) subsidiary, issued a $96.7 million green bond to fund the second phase of its Itimpi solar plant in Zambia. The expansion will add 136 MW, increasing the plant’s total capacity from 100 MW to 236 MW.
Cygnum Capital arranged the bond, with Stanbic Bank Zambia as the underwriter and book-runner. Major international investors, including FMO and the Dutch Development Bank, participated in the funding.
Zambia relies on hydropower for 83% of its electricity generation, but droughts have reduced dam capacities, causing power shortages. The country’s total installed energy capacity stands at 3,356.6 MW, with coal contributing 9%, heavy fuel oil 5%, and solar only 3%.
CEC initiated the Itimpi solar project to diversify Zambia’s energy sources. The expansion helps address the energy deficits caused by unreliable hydropower while keeping the overall energy mix relatively stable.
CEC’s new green bond targeted a growing demand for green-labelled investments. These bonds appeal to investors seeking stable returns from environmentally friendly projects. CEC seized this opportunity to secure capital and address Zambia’s energy needs.
CEC first issued a bond for the Itimpi project in 2023 to fund the initial phase. The company chose a phased financing strategy to manage risks tied to Zambia’s economic and climatic conditions.
Owen Silavwe, Managing Director of CEC, emphasised that the bond supports the company’s strategic goals. He stated that the initiative directly tackles structural issues in Zambia’s power grid without focusing on environmental or social causes.
Though CEC designated this bond as “green,” it remains a financial tool to raise capital for specific projects. Investors are attracted by the potential for steady returns, even amid fluctuating interest rates.
The Itimpi solar plant is key to Zambia’s future energy strategy. By expanding solar capacity, CEC aims to reduce the country’s reliance on hydropower, which has become less reliable due to climate change.
The Itimpi project demonstrates how solar energy can drive Zambia’s energy transition and sets a potential model for future projects that balance energy supply with the realities of climate risks.
Zambia faces ongoing energy challenges, and the Itimpi project offers a solution to stabilize the country’s power supply. The expansion increases capacity and strengthens the country’s resilience to hydropower disruptions. The $96.7 million green bond represents a significant milestone in Zambia’s renewable energy journey.
In conclusion, CEC Renewables’ green bond issuance for the Itimpi solar plant expansion underscores the increasing importance of renewable energy in Zambia. It highlights a strategic response to immediate energy concerns and reflects a broader shift toward sustainable solutions.