Mercuria, a global energy and commodities group, and Exergy Energy, an Africa-focused integrated energy investor, have finalized a $250 million financing agreement in Lusaka, Zambia. This deal is significant as it represents one of the largest private capital commitments to Zambia's power sector and marks Mercuria's initial foray into the region's power market. The investment will primarily finance generation and transmission projects through two Exergy subsidiaries, Lunzua Power Company and Lusitu Transmission and Distribution Company, with several projects already in progress.
The funds will support Exergy's pipeline, which aims to contribute to Zambia's target of 10,000 MW of power supply by 2031, a key part of the nation's "Grow Zambia" agenda. Additionally, Exergy's regional trading and cross-border initiatives align with the World Bank and African Development Bank's "Mission 300," an effort to provide electricity to 300 million Africans by 2030. Exergy operates across the power value chain with subsidiaries like Lunzua Power (generation), Lusitu Transmission and Distribution (transmission), and Kanona (trading), actively participating in the Southern African power market and developing a transmission highway to connect Zambia with East Africa.
Both companies emphasized that Zambia's power sector reforms, including open access in the electricity market, were crucial in enabling this independent investment. Mercuria highlighted Zambia's stability, growth plan, and strategic regional position as key factors in its decision to commit long-term capital. Mercuria will provide not only financial backing but also market knowledge, analytics, trading risk management, and global relationships to support Exergy's operations, combining its trading expertise with Exergy's operational knowledge. Exergy noted that Mercuria's global perspective on energy and commodity markets, and the interconnections between power, metals, and trade, are as valuable as the capital itself.
Mercuria's involvement in this power deal follows other strategic moves in Africa, including a partnership with Zambia’s Industrial Development Corp. on a metals trading venture. This venture aims to boost Mercuria's exposure to copper and has already secured copper concentrates for sale. Kostas Bintas, Mercuria’s new head of metals, has indicated that the trading house is keen on taking equity stakes in African projects to build out a large-scale metals business, reinforcing its commitment to the continent's resource sector.
