Danish pension-backed $1bn Africa fund set for maiden deal

The AP Moller Capital vehicle has teamed up with UK DFI CDC to place an offer worth $380m for Zambian utility Copperbelt Energy.

The AP Moller Capital-managed Africa Infrastructure Fund is close to securing its first deal following a 3.7 billion kwacha ($378.8 million; €302.1 million) offer for Zambian utility Copperbelt Energy Corporation.

The fund – backed by four Danish pension funds last year – has made the offer alongside CDC Group, the UK’s development finance institution for 80 percent of the company. AP Moller confirmed it would be taking a 21 percent stake of the vehicle held alongside CDC.

CEC supplies 50 percent of Zambia’s power and its assets include a transmission and distribution network of around 1,000km supplying more than 700MW of power, a 40MW hydropower project, as well as providing fibre optic broadband and telecoms services. The group has been listed on Zambia’s stock exchange since 2008.

“CEC is one of Zambia’s leading companies, but we believe it has much more to offer,” said Sameh Shenouda, head of infrastructure at CDC. “Under CDC and AP Moller’s ownership it is planned that CEC will bring an additional 150MW of renewable generation to the Zambian network and increase the amount of much-needed power available.”

Shenouda insisted the pair’s plans have the support of the Zambian government, owner of CEC as part of ZCCM until privatisation in 1997. The Zambian energy sector is one of the most well developed in Africa, according to CDC and AP Moller. They believe the regulatory framework encourages private sector investment and intend to increase CEC’s market share as well as diversify its offering.

Copenhagen-based AP Moller Capital was formed last year and set up the Africa Infrastructure Fund in August, targeting total commitments of $1 billion. The fund received an initial $550 million investment by Danish pension trio PKA, PensionDanmark and Laegernes Pension and a further $100 million in September by PFA.

The 10-year vehicle is seeking returns in the high teens across a portfolio of between 10 and 15 investments. The group is led by Kim Fejfer, former chief executive of container terminal operator APM Terminals.