Affirma Capital leads $145m deal for Zambia's Copperbelt Energy Corporation
Affirma Capital leads $145m deal for Zambia's Copperbelt Energy Corporation
Affirma Capital has led a $145 million investment into Copperbelt Energy Corporation.
For the best experience and to access our Connect industry chat platform, download the Africa Private Equity News app: Android | iOS
Affirma Capital (formerly Standard Chartered Private Equity) has led a $145 million investment into Copperbelt Energy Corporation (CEC) in an significant single-asset continuation deal in Africa.
The private equity firm originally invested in CEC in March 2014 via a structured equity investment backing the company’s controlling shareholder. In March 2018, Affirma Capital converted its investment into a 34.64% shareholding in CEC.
CEC is an independent power transmission and distribution company in Zambia and is listed on the Lusaka Securities Exchange. The company’s core business consists of distributing power to the majority of mines operating in Zambia’s Copperbelt Province and bordering Katanga Province in the Democratic Republic of Congo (DRC). The company also transmits power for ZESCO Limited, the Zambian national utility and is engaged in trading, buying and selling electricity from public and independent electricity generation companies in the Southern African Development Community (SADC) as part of the Southern African Power Pool (SAPP). The company is investing heavily in renewable energy with a 34MW operating solar plant and another 60MW plant due to be commissioned in January 2024.
Affirma Capital is teaming up with Norfund and Kommunal Landspensjonskasse gjensidig forsikringsselskap (KLP) to provide financing for the transaction. Norfund is a Norwegian state-owned development finance institution focusing on a variety of sectors, including clean energy, financial institutions, green infrastructure and agribusiness. KLP is the largest pension fund in Norway managing a large share of Norwegian public sector pensions and is owned by municipalities, health enterprises and businesses with public-sector pensions. Standard Bank is supporting the transaction with $50 million of acquisition financing.
Since its investment in CEC in 2014, Affirma Capital has led a number of initiatives to strengthen the business. In 2016, CEC was demerged from CEC Africa, its 100% owned subsidiary which was focused on Nigeria, via a dividend in specie to CEC shareholders. This was followed by the sale of CEC’s stake in CEC Liquid, a 50/50 JV with Liquid Telecoms, to its JV partner.
The business then focused on deploying capital in its core business in Zambia as well as building out the power trading business in neighbouring Katanga Province. Recent initiatives have seen the company deploying significant capital in developing its own solar projects.
From 2014 to 2023, CEC generated about $600 million of cash, paid $285 million in dividends, reduced debt by about $120 million while investing heavily in critical infrastructure like the two solar plants, the interconnector into the DRC and extending its infrastructure to reach new customers. With this transaction, Affirma Capital, Norfund and KLP would want to see CEC expanding its investments in both transmission infrastructure and renewable energy in the years to come.
Ronald Tamale, founding partner and head of sub-Saharan Africa at Affirma Capital said, “We are excited to partner with Norfund and KLP on CEC, an asset which we are extremely bullish on. We look forward to continuing the journey with existing shareholders, management and the board in building a leading energy company in Africa. Hopefully a transaction of this nature will be testament that private equity firms can team up with like-minded investors from different spheres to be long-term owners of businesses in Africa.”
* Subscribe to Africa Private Equity News’ monthly Dealmaker’s Log for a database of the reported investment deals, exits and fundraising closes. Click here for more information.