LOCAL PARTICIPATION IN GREEN BOND LOW

 LOCAL SUBSCRIPTION IN GREEN BONDS LOW

...only 10% local firms fully subscribed to the first CEC $54 million tranche.


By Alfonso Kasongo 
As Copperbelt Energy  Corporation Company strives to actualize its green energy generation ambitions through Zambia’s firstever Green Bond, local subscription to the $200 million green loan on the  capital market continues to be low.
Currently Zambia,is grappling with power deficit challenges from her hydropower dependant sources.

The country has an installed hydro power generation capacity of about 3,356.6 MW-now depleting rapidly by El Nino factors and created an estimated 750MW deficit. 

Unless imports coupled with off-grid power supplement, the country may face daunting challenges to supply the mine’s 55 percent demand with 45 % percent shared by other end-users-many now affected by the over 12-hour power outage.

In effort to supplement to hydropower, On December, 5th 2023, CEC announced the registration of its green bond with the Securities and Exchange Commission on the sidelines of the COP 28 Climate Summit in Dubai. 

The US$200 million Green Bond, structured as a programme, whose proceeds aim to accelerate the actualisation  of at least 200MW of renewable energy generation, specifically solar energy with possible storage implementation.

This registration of the Green Bond is first for Zambia’s capital markets and is expected to trigger more green finance in the country.

 However,  the Energy company recorded only 10 percent of the first $54 million tranche from Zambian firms leaving 90 percent to foreign companies.

Speaking during a Climate Finance Awareness Symposium in Lusaka organized by the Indaba Agricultural Policy Institute ( IAPRI), CEC Senior Corporate Manager Project Finance, Lizzie Muwowo said the low participation in green bond by the local firms is worrisome.

Ms Muwowo,however, stressed the need to think outside the business if the country is to remain climate resilient. 

Issuance of subscription to the bond opened in December of 2023 and by 28th December 2023, the first $54 million tranche was fully subscribed.

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