Standard Chartered’s Private Equity Africa division (SCPE) announced its first investment in Africa’s developing power sector.
SCPE has invested USD57 million into Zambian Energy Corporation, the controlling shareholder of Copperbelt Energy Corporation Plc. This structured equity investment equates to an effective 25.8% equity stake in CEC Plc.
CEC Plc is an independent power transmission and distribution company in Zambia, and is listed on the Lusaka Stock Exchange. The Company’s core business consists of distributing power to the mines operating in Zambia’s Copperbelt, and transmitting power for ZESCO Limited, the Zambian national utility. CEC Plc recently established CEC Africa (CECA), a Mauritius-domiciled platform company as its vehicle for power infrastructure investments in Africa, outside of Zambia. CECA has acquired two operating assets in Nigeria through the recently concluded power sector privatisation programme, and has a rich pipeline of development power assets in Zambia, Namibia and Sierra Leone.
Standard Chartered’s investment supports CECA’s pan-African expansion strategy, and is the first investment within the Bank’s USD2 billion commitment to ‘Power Africa’, a public-private sector partnership launched by US President Obama on his trip to Africa last year. In Nigeria, CECA has already acquired a controlling interest in the Abuja Electricity Distribution Company and a 20% stake in the 600MW Shiroro hydro plant. Nigeria’s power privatisation initiative is expected to increase system-wide generation capacity and connectivity, while reducing costs and technical losses, thereby facilitating a self-sustaining power sector which supports Nigeria’s economic growth.
According to the World Bank, Africa’s total infrastructure spending need is USD93 billion per annum. Of that, Africa should be spending USD41 billion on power, installing 7,000 MW per annum of generation capacity, just to keep up with electricity demand. The ‘Power Africa’ partnership will provide USD7 billion of US financing support and an initial USD9 billion of private sector commitments for power generation projects – ultimately delivering 10,000 megawatts of new electricity generation across 6 countries, reaching 20 million individuals in 5 years.
