The first-ever green bond in Zambia is being issued by Copperbelt Energy Corporation (CEC). The initiative hopes to generate $200 million to produce solar energy using photovoltaic cells.
Zambia is entering the green bond market. The nation's first bond is being issued by CEC Renewables (CECR), a subsidiary of Copperbelt Energy Corporation (CEC), a private energy production, transmission and distribution company listed on the Lusaka Stock Exchange. The $200 million program was announced on the sidelines of the 28th United Nations Conference of the Parties on Climate Change (COP28) in Dubai, Joined Bedouin Emirates (UAE).
The Private Infrastructure Development Group's (PIDG) Emerging Africa Investment Fund (EAIF) and the South African bank Absa contributed the first $54 million tranche. EAIF representative Paromita Chatterjee states, "We are happy to be the lead investor in Zambia's first green bond program" at COP28. According to the Securities and Exchange Commission, this initial experience "will catalyze the listing of other green bonds for the purpose of raising capital for green initiatives, and will assist with strengthen capital in our country" (SEC).
On 2 January 2024, EAIF gave concrete expression to its commitment by announcing a "de facto" subscription of $50 million of the $54 million in green bonds gave under the first tranche. As indicated by the PIDG Company, the proceeds from this first tranche will be utilized to develop two solar photovoltaic power plants with a combined production capacity of very nearly 100 MW.
Through this green bond program, CECR plans to develop an installed solar capacity of 200 MW. This exchange has been announced when Zambia is only just beginning to exploit its solar potential, assessed at 2,300 MW by the American think tank the Atlantic Council. The point of creating solar power is to expand the country's electricity mix, which is 83% dependent on hydroelectric dams (2,393 MW as according to Power Africa) to produce its electricity.
Large-scale solar energy production has previously been initiated in Zambia; in February 2023, a 33 MW solar power facility in Kitwe, in the Copperbelt province, was opened. The $200 million green bond scheme is organized by London, UK-based investment firm Cygnum Capital, which has also drawn interest from regional investors.