AsiaNet  84254

LUSAKA, Zambia, June 4, 2020 /PRNewswire=KYODO JBN/ --

The Copperbelt Energy Corporation Plc (CEC) has become aware of Statutory

Instrument No. 57 of 2020 (SI 57) issued by the Minister of Energy, Honourable

Mathew Nkhuwa, declaring all of CEC’s distribution and transmission lines as

Common Carrier.

This declaration came just hours before the expiry of CEC’s power supply

agreement (PSA) with Konkola Copper Mines Plc (KCM), which took effect at

midnight on 31 May 2020 and in the wider context of the failed negotiations for

the renewal of the Bulk Supply Agreement (BSA) between CEC and ZESCO, which

lapsed on 31 March 2020. Both KCM and ZESCO are, as of now, effectively

controlled by the Government of the Republic of Zambia (GRZ).

CEC notes the following significant events leading to the issuance by the GRZ

of SI 57:

1) 8 May 2020 - CEC institutes measures to recover debt from KCM, which has now

grown to about USD144 million

2) 13 May 2020 - KCM admits its indebtedness to CEC

3) 26 May 2020 - ZESCO requests use of the CEC transmission network to supply

power to its new unknown client on the Copperbelt and requests for a meeting in

the first week of June 2020

4) 28 May 2020 - CEC acknowledges the ZESCO request, stating that it stands

ready to start negotiations as long as the customer involved has no valid

agreement with CEC and does not owe CEC money

5) 28 May 2020 - the Minister of Energy writes to CEC asking the Company to

give path to ZESCO to supply power to KCM  

6) 29 May 2020 - GRZ through the Minister of Energy promulgates SI 57 declaring

CEC infrastructure COMMON CARRIER

7) 31 May 2020 - ERB writes CEC setting a wheeling tariff equivalent to about

30% of CEC’s current network tariff (current tariff charged for using the CEC

network)

From the above events, CEC believes that the GRZ has for all intents and

purposes taken steps that amount to expropriation of the CEC infrastructure and

CEC is now on the brink of defaulting on all its loans borrowed from

international lenders. GRZ’s actions have the full effect of taking away CEC’s

commercial and property rights, and completely inhibiting the Company from

taking viable business decisions, including enforcing its legal and commercial

rights in the best interest of the business.

CEC takes this opportunity to advise all its investors of these actions from

the GRZ that are highly detrimental to the well-being of the business and its

ability to continue as a going concern. Investors are notified that CEC will,

in the time being, engage in dialogue with the GRZ in the hope of obtaining an

amicable and equitable outcome targeted at restoring the Company’s commercial

and property rights. CEC will keep all its investors fully updated.

For further information, contact:

Chama S. Nsabika

Senior Manager Corporate Communication

+260 212 244914

+260 966 792922

nsabika@cec.com.zm

https://cecinvestor.com/

SOURCE: Copperbelt Energy Corporation plc