In accordance with Section 81(1) of the Securities Act No. 41 of 2016, the Board of Directors of Copperbelt Energy Corporation Plc (“CEC” or “the Company”) advises the Company’s shareholders, and the market, that further to the Market Announcement issued by the Company on 2nd January 2020, the power purchase agreement or Bulk Supply Agreement (“BSA”) between CEC and ZESCO Limited (“ZESCO”), entered into on 21 November 1997 came to an end on Tuesday, 31st March 2020.
In the last circa seven weeks, CEC and a Government of the Republic of Zambia (“GRZ”) team which included ZESCO have been engaged in negotiations for a new power supply agreement. While the initial understanding was that the parties would work to put in place an interim agreement, it became clear during the negotiations that the intention was to agree a wholesomely new agreement with totally different terms. CEC believes that throughout the negotiation, it held its end of approaching the negotiations in good faith. At end of day on 31st March 2020, the parties had not reached agreement on account of certain terms seen as key requirements from either side and which so far are not acceptable to either party. On its part, CEC has faced some terms being demanded by the GRZ team which, if accepted, would be injurious to the CEC business and impact its ability to continue operating as a going concern.
In CEC’s view, achieving a mutually acceptable power supply agreement between the parties remains of strategic importance to the electricity sector and the country. Therefore, CEC remains confident that the parties will use the next several weeks to narrow the negotiation gap so as to achieve the much required new power supply agreement between them.
CEC wishes to assure its shareholders and all stakeholders that it will do its best to ensure that any agreement it enters into will be negotiated in good faith and reflect a fair outcome so as to ensure the business continues to operate as a going concern thereafter.
It is CEC’s understanding that in the meantime, both CEC and ZESCO remain committed to continue meeting their full obligations to their customers without service being affected in any way. On its part, CEC reiterates its total commitment to continue providing seamless power supply services to all its customers (mining and non-mining consumers) on the Copperbelt while the parties continue to seek resolution of the outstanding matters and follow through with conclusion of the negotiation for a new power supply agreement.
By Order of the Board
Julia C Z Chaila
Issued in Lusaka, Zambia on Wednesday, 1st April 2020