Company Report: Copperbelt Energy Corporation
Copperbelt electrifies Zambia Copperbelt Energy Corporation is not just a reliable source of power for Zambia's copper mines. Michael Tarney tells Energy Digital how CEC plans to generate new business and achieve its corporate goals

The Copperbelt Energy Corporation (CEC) supplies electricity to the mining companies based in the Copperbelt province of Zambia, including Vedanta Resources-owned Konkola Copper Mines, the country's largest copper producer.
"CEC also transmits power for national utility ZESCO Ltd and its DRC counterpart, SNEL, through the Zambia-Congo interconnector," says Michael J Tarney, Managing Director of Corporate Development at Copperbelt Energy Corporation PLC. "CEC owns the Zambian part of the interconnector. Approximately 50 percent of Zambia's electricity demand goes through the CEC transmission network."

The origins of the company stretch back more than 50 years when a power line, designed to bring hydro-electric power to the country's mining industry for the first time, was built from Katanga in the Democratic Republic of Congo (DRC) to Kitwe in Zambia. "CEC was first known as the Rhodesia-Congo Border Power Company," continues Tarney. "In 1964 it was renamed the Copperbelt Power Company and in 1982 became the Power Division of ZCCM (Zambia Consolidated Copper Mines), a merger of the country's major mining concerns. In 1997, the Power Division was privatised and CEC was born.

In 2006, the Zambian Energy Corporation (Zam-En) acquired a 77 percent shareholding in CEC from the then majority shareholders National Grid of the UK and Cinergy Global Power (now Duke Energy) of US. The following year, Zam-En sold off 25 percent of its shares in CEC to employees and the public, who include individuals and institutional investors, through a public offer and was last year listed on the Lusaka Stock Exchange.

"CEC has come a long way since its beginnings in the 1950s and there are plans for further development," Tarney adds.

The company's vision is to be the leading Zambian investor, developer and operator of energy infrastructure in Africa by providing innovative solutions and building strategic partnerships through committed professional teams.

CREATING SPARKS
CEC is making substantial progress on this. The company's most recent financial results demonstrate considerable achievements. In the last year, sales were up by 35 percent, gross profit had increased by 28 percent and net profit had grown by 40 percent. Turnover added up to a healthy $177 million. Corporate challenges come in all shapes and sizes and Tarney acknowledges CEC has experienced some good fortune: "Our main challenge at the moment is to manage growth. But it's a nice challenge to have, compared to the challenge of survival," he says. There has, however, been a reduction in demand from the mines, as a result of the economic downturn.

"We are expecting turnover will be slightly less this year, due to the mines cutting back," Tarney continues. "But we expect demand to recover and that the following year's turnover figures will be much stronger."

THE CEC TEAM
Tarney joined CEC 10 years ago, as Financial Director and was appointed to his current position in 2006. He was previously Financial Controller at the National Grid in the UK. His background and experience places him in a strong position to take the company forwards and he has a clear vision of the people he needs to support that aim, as he confirms: "The majority of our 420 employees are graduates and skilled workers. We look for highly motivated, ambitious people, who work well within a team." He adds: "We recruit almost exclusively from within Zambia, but we also second people abroad, for example to the U.S. and the UK, to gain further experience in world class transmission and generation operators." There are plans to add to the CEC workforce, as he explains: "We are expecting the workforce to grow by five percent each year. At the moment we need more engineers for forthcoming projects.

"Hiring should not present any difficulties," says Tarney. "We are a successful Zambian company and we have a good company culture - our employees enjoy working here and others want to work for us."

KNOWLEDGE IS POWER
Learning and development is also a high priority at CEC, as can be seen from the establishment of the company's Learning and Development Forum (LDF) to enable the exchange of knowledge and expertise within the company. One of the benefits of LDF is that it helps management identify which employees have experience in specific areas. The format is simple: employees research and make a presentation on a topic relevant to CEC's activities to the Forum. The sessions are recorded, for reference, so that others can access that knowledge, as and when required.

Staff have reported that they find the sessions an enjoyable way to learn about the company's operations and that they have learned something new about CEC from each of the presentations to date. Around 20 to 30 employees have attended each session and most have returned to participate again.

CORPORATE CITIZENSHIP
CEC bases its business on ethical values and is committed to good corporate citizenship. Earlier this year, it won an award from the Zambia Revenue Authority for being "exceptionally tax compliant and contributing to national development", in the large taxpayer category - Electrical, Gas and Water sector.

Executive Chairman, Hanson Sindowe, who received the award, said it was an "honour" to be recognised among the first recipients of an initiative that recognises and appreciates the role of tax payers in national development and equally gratifying that the taxes CEC pays enable the government to provide goods and services to the citizens of Zambia.

CEC's activities were also recently acknowledged by North-Western Province Permanent Secretary, Dr Eustern Mambwe, who commended the company for its hydro-power development programme in the province and for involving Zambian engineers in such a key project.

PLANS FOR THE FUTURE
CEC prides itself on being a Zambian company, driven forward by Zambians, for the benefit of the country.

"It is our goal to contribute to the economic empowerment of local people," says Tarney. "We want to keep encouraging more investment and developing new power stations to enable more new industries to get off the ground. They need power to be able to start up and we can provide supply. It's a virtuous circle." One of CEC's other main goals is to expand geographically; and the company is progressing with projects in Zimbabwe and in the DRC, where it is working on the construction of the second line of the interconnector between Zambia and the DRC. The joint venture, with SNEL, the DRC's national power utility will cost around $14 million.

CEC has also recently increased its investment (by $2 million) in the telecommunications sector in the form of a joint venture to acquire a 50 percent interest in Realtime Technology Alliance Africa Ltd. The joint venture combines the fibre network management skills of CEC with Realtime's expertise in providing network services to corporate customers. The goal is to become the market leader in the provision of quality broadband in the region.

"Despite the impact of the global credit crunch, there is a lot of optimism about the future," Tarney says.

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