Exergy, an Africa-focused integrated energy investor, and Mercuria, a global energy and commodities group, have signed a US$250 million financing agreement in Lusaka, marking one of the largest private capital commitments to Zambia’s power sector and Mercuria’s entry into the region’s power market.
Subject to regulatory approvals, the financing will support generation and transmission projects being developed by two Exergy subsidiaries, Lunzua Power Company and Lusitu Transmission and Distribution Company, several of which are already underway.
Exergy operates across the power value chain through three subsidiaries: Lunzua Power, which focuses on generation; Lusitu Transmission and Distribution, which focuses on transmission; and Kanona, which manages power trading and balances surplus and deficit positions.
The company actively trades in the Southern African power market and is developing several infrastructure projects, including a transmission highway intended to link Zambia with the East African power market.
Through its subsidiaries, Exergy’s project pipeline is expected to contribute to Zambia’s target of reaching 10,000 MW of electricity supply by 2031, a key pillar of the Grow Zambia agenda.
The projects are also aimed at supporting reliable power supply for critical sectors including mining, agriculture, manufacturing, tourism and industry.
At the regional level, Exergy’s trading and cross-border ambitions align with Mission 300, the World Bank and African Development Bank initiative to connect 300 million people in Africa to electricity by 2030.
Exergy said the agreement demonstrated confidence in Zambia, the wider region and the ability of global partners to finance African energy infrastructure at scale on commercial terms.
The company said that, with the objectives of the Grow Zambia agenda dependent on reliable electricity, it was positioned to help ensure that the country’s previous energy challenges were not repeated while supporting the development of a self-sustaining power ecosystem.
Exergy added that Mercuria’s contribution extends beyond capital. As one of the world’s largest energy traders, with operations in more than 50 countries, Mercuria brings a global perspective on energy and commodity markets and the relationship between power, metals and trade.
According to Mercuria, Zambia’s stability, growth agenda and regional position were key factors behind its decision to commit long-term capital to the country.
Mercuria said it was pleased to contribute to addressing power infrastructure bottlenecks that have traditionally constrained Africa’s economic growth.
In selecting a partner, Mercuria said it sought power industry expertise, a disciplined team and an execution-ready project pipeline, which it found in Exergy, describing the company as a scalable regional platform that it wants to help develop.
Mercuria also highlighted the role of private capital in developing strategic energy infrastructure alongside the traditional development finance institution and development bank model.
Both companies credited reforms in Zambia’s power sector, including the introduction of open access to the electricity market, with creating opportunities for independent companies to build and expand their operations.
Mercuria’s commitment extends beyond the financing agreement and includes market knowledge and analytics, trading risk management and global relationships to support Exergy’s project delivery.
The partnership will combine Mercuria’s trading capabilities with Exergy’s operational knowledge of the power sector.
Bordered by eight countries and positioned within the Southern African Power Pool, with expanding connections to East and Central Africa, Zambia is increasingly positioned as a potential hub for regional power trade.
