The private equity arm of British multinational banking and financial services firm Standard Chartered has paid $57 million to acquire 25.8 percent stake in Lusaka Stock Exchange-listed power transmission and distribution company, Copperbelt Energy Corporation’s (CEC) parent company Zambian Energy Corporation, marking its first investment in Africa’s growing power sector.
CEC is an independent power firm supplies power to miners operating in Zambia’s Copperbelt, a mineral-rich region in Africa’s largest copper producer, Zambia. It also delivers power to Zambian national utility,
ZESCO and recently established CEC Africa (CECA) which it use as its vehicle for power infrastructure investments in the continent, outside of Zambia.
The power company recently acquired stakes in two operating assets in Nigeria’s power industry – a controlling interest in the Abuja Electricity Distribution Company and a 20 percent holding in the 600MW Shiroro hydro plant.
Meanwhile, Standard Chartered continue to forge ahead in its plan to increase its private equity investments in Africa.
In a joint statement released by the companies, Ronald Tamale, Director of Standard Chartered’s Africa Private Equity Division noted that Private Equity is becoming 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.
The company, which is also focuses on developing SMEs in Africa in an independent study this year revealed plans to bring around $10.7 billion (₤6.44 billion) into sub-Saharan Africa’s local economy.
It also pledged to increase its annual lending to SMEs by 45 percent over the next five year, adding about $3 billion (₤1.8 billion) to its lending power to Africa’s small business sector.
In January, it bought 13 percent in Botswana-listed supermarket chain Choppies Enterprises for about $60 million.
Expressing the company’s stance on SMEs in Africa, Marianne Mwaniki, Standard Chartered’s Head of social and economic impact, posits that: “In markets where credit is difficult to find, once SMEs do have access, they increase their productivity significantly.”