Standard Chartered Private Equity initiates ‘Power Africa’ Partnership with USD57 million investment in Copperbelt Energy Corporation

11 Mar 2014

Lusaka, Zambia – Tuesday 11 March 2014: 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 (“ZamEn”), the controlling shareholder of Copperbelt Energy Corporation Plc (“CEC Plc” or the “Company”). 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 USD2billion 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.

Michael Tarney, Managing Director for Corporate Development at CEC Plc commented, “Our success in Zambia has given us the experience and capability to generate, transmit and distribute power in other African markets. We are excited about our two strategic acquisitions in Nigeria. Over time, we expect that the Abuja Disco will deliver consistent and reliable power to more than 750,000 customers in Nigeria. Capital investment of more than USD180 million is anticipated in the business plan covering our distribution operations in Abuja, Niger, Kogi and Nasarawa States. With Standard Chartered’s valuable support, we look forward to building significant business scale and delivering sustainable benefits to Nigeria’s economy.”

Diana Layfield, CEO Africa for Standard Chartered reiterated, “This is our first contribution towards the Bank’s USD2 billion commitment to ‘Power Africa’ – a public-private partnership which is set to double Sub Saharan Africa’s access to electricity over the next 5 years. ‘Power Africa’ enables us to live our brand promise and be here for good, making a tangible difference in the lives of individuals. By financing the real economy, investing in the continent‘s infrastructure and supporting trade and its people, banks can really help transform Africa’s prospects.”

Ronald Tamale, Director within Standard Chartered’s Africa Private Equity Division, added, “CEC is another African success story, and is emerging as an important Standard Chartered client. CEC has a strong management team and inspiring growth potential, extending commercial and economic benefit to multiple countries across the continent. Private Equity is an increasingly useful tool in supporting the growth of African companies who have achieved local success, but now need structured capital and specialist expertise to develop a profitable, pan-African presence.” Mr. Tamale and Mr. Kanad Virk, Managing Director for SCPE’s Energy, Resources & Infrastructure investment team, will be joining CEC Plc’s and CECA’s boards of directors.

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. Standard Chartered has made the largest private sector contribution to the partnership thus far.

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