Old Mutual in talks for stake in Zambia power plant | Fin24
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Old Mutual in talks for stake in Zambia power plant

Jun 03 2015 20:31
Matthew Hill

Johannesburg - Zambia’s Copperbelt Energy is in talks with Old Mutual [JSE:OML], to sell it a stake in a $220m hydropower project in the country’s northwest.

“We are speaking to them and they seem to be very interested,” Hanson Sindowe, chairperson of the power supplier, said in an interview on Tuesday in Lusaka, the capital of Africa’s second-largest copper producer. “They are carrying out their own due diligence.”

Copperbelt Energy, the biggest power supplier to Zambia’s mines, plans on completing financing for the Kabompo Gorge hydro-power project by the end of the year, Humphrey Mulela, who heads the unit overseeing its development, said in a separate interview. The 40 MW plant will help ease a power deficit that could disrupt mining operations this year, Sindowe said.

Copperbelt Energy, or CEC as it’s also known, plans to sell a 40% stake in Kabompo Gorge, and to fund the remaining 60% through debt, according to Mulela.

The company has hired Standard Bank to arrange the debt. Copperbelt has also been talking to other potential investors on the equity stake, he said.

“There are a number of them and one of the main ones is Old Mutual,” said Mulela. “They’ve been proposing to look for other companies to come on board so that they share the risk.”

William Baldwin-Charles, a London-based spokesperson for Old Mutual, didn’t immediately reply to an e-mail seeking comment.

CEC intends to complete Kabompo Gorge in 2018, Sindowe said in a speech earlier Tuesday, when the company signed an investment agreement for the project with the Zambian government.

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