Zambia’s Bold Step Toward A Greener Future: CEC-R Secures $96.7 Million Green Financing

CEC Renewables Expands Solar Capacity Amid the National Energy Crisis with the Launch of the Second Tranche of its Green Bond Programme

December 6, 2024

A group of people posed in front of a CEC Renewables banner — CEC Renewables celebrates a landmark moment with the LuSE, SEC, and the Ministry of Energy and other stakeholders, through the bell-ringing ceremony, marking the successful issuance and listing of the USD 96.7 million second tranche of its 200 USD Million total registered Green Bond

BIOFIN Zambia

As Zambia continues to address the impacts of drought and the ensuing energy crisis, Copperbelt Energy Corporation Renewables (CEC-R) continues to showcase the country’s capacity to attract investment for sustainable development. In its efforts to reshape the country’s energy sector through solar energy as an alternative energy solution, CEC-R announced the successful issuance of its second Green Bond tranche this December 2024, valued at US$96.7 million. This follows the earlier achievement by CER-R having secured US$53.5 million in its first tranche, as part of a US$200 million green bond programme registered in December 2023. This marks a pivotal milestone in Zambia’s green finance landscape, demonstrating the nation’s potential as a destination for green investment, while highlighting the country’s commitment to achieving its renewable energy ambitions.

This bond issuance is more than a financial achievement — it reflects Zambia’s broader commitment to embedding sustainability into its financial systems. Officially listed on the Lusaka Securities Exchange (LuSE) during a ceremonial bell-ringing event, the issuance of the second green bond tranche brought together key stakeholders, including government officials, private sector leaders, and institutional investors. Among the collaborators were Cygnum Capital as Lead Arrangers, Stanbic Bank Zambia as Lead Manager and Underwriter, and prominent investors like ZCCM Investments Holdings Plc and FMO, the Dutch entrepreneurial development bank.

“This initiative is a template for future issuance,” remarked James Doree of Cygnum Capital, emphasising its potential to attract both local and international investors while driving transformative energy projects.

The second tranche of the total registered green bond is intended to finance the second phase of the Itimpi Solar PV Plant, a project expected to generate an additional 136 MW of solar power. Once completed, this expansion will bring CEC-R’ total solar generation capacity to 236 MW.

Speaking on the significance of this achievement, CEC-R’ Board Chairperson, London Mwafulilwa, noted, “Today is a testament to the power of collaboration and shared vision. Together, we are not just investing in energy; we are investing in the future of Zambia, one powered by sustainability, innovation, and opportunity.”

This milestone builds on the foundational work of the United Nations Development Programme Biodiversity Finance Initiative (UNDP BIOFIN). Since 2019, BIOFIN Zambia has played an instrumental role in developing the country’s green finance ecosystem by establishing critical frameworks like the Green Bond Guidelines. It has also successfully advocated for critical incentives, including the exemption of withholding tax for green bond investors by the Ministry of Finance and National Planning (MoFNP), and the reduction of the green bond registration fees by the Securities and Exchange Commission (SEC). Now in its second phase, BIOFIN is focused on addressing market barriers and providing technical support to ensure that projects like the Itimpi Solar PV Plant, along with other green initiatives such as biodiversity conservation, set new benchmarks for sustainable development.

While hydropower remains a cornerstone of Zambia’s energy sector, ongoing droughts have highlighted its vulnerabilities. Coupled with deforestation-driven biomass dependency, Zambia’s energy landscape has faced significant strain. Solar energy, exemplified by the Itimpi Solar PV Plant, offers a promising alternative, meant to complement the country’s existing energy solutions. Scheduled for completion in 2025, the plant will provide clean energy, reduce reliance on natural resources, and enhance the country’s climate resilience.

“As we progress, our commitment remains steadfast to actualise our green energy ambitions, bridge the energy gap that persists in Zambia, and advance sustainability while fostering the growth of our capital markets,” added Mr. Mwafulilwa.

The issuance of this second green bond tranche marks the maturation of Zambia’s green finance market. For investors, it demonstrates a model of reliability and long-term impact. For policymakers, it underscores the importance of collaboration between public and private sectors to address the intertwined challenges of energy security and climate change, including other key issues such as environmental degradation and biodiversity loss.

As Zambia charts a sustainable path forward, the success of this green bond is both a milestone and a call to action — a reminder that innovative financial mechanisms are critical to balancing economic growth with environmental stewardship.