Chairman’s statement
I am pleased to present the Annual Report of CEC Africa Investments Limited (CEC Africa) for the year 2016. Like other players in the Nigerian power sector, CEC Africa could not escape the twin effects of currency devaluation and rising inflation; leading to negative economic growth in the country for the first time in twenty-five years. Notwithstanding these challenges, the year has been interesting and rewarding as we continue to take strides to turn around the Abuja Electricity Distribution Company Plc (AEDC), and to achieve optimum performance of the 600MW Shiroro Hydro Power Station.
A significant occurrence towards the end of the year was the conversion of CEC Africa from a private company into a public limited company following a demerger from Copperbelt Energy Corporation Plc which has until now, been the sole shareholder. The demerger was undertaken with the intent of ensuring that the Company’s shareholders adequately capture the value inherent in the investments in Nigeria. It does not however, herald a complete severance of ties with Copperbelt Energy Corporation Plc, as an arm’s length technical services arrangement continues to exist between the two companies.
We believe that building on the tangible improvements that have already began to occur in our operations in AEDC, we shall grow from strength to strength. Some of the improvements that we have been able to record include:
- A more than 10% reduction in losses due to better management of power theft;
- Improvement in revenue collection;
- Consistently ranking as the best distribution company in the Nigerian power sector; and
- A roll out of new business processes across the company.
With regard to our investment in Shiroro Hydro Power, through North South Power Company Limited, the challenge that we have been facing of a currency mismatch is expected to be resolved in the first quarter of 2017, in collaboration with the regulators and the Federal Government. Resolution of the matter will firmly place the company on the path to sustained profitability.
A strategic decision to withdraw from some of the pipeline projects was taken during 2016 and we believe that this was the most prudent approach to retain value as well as enhance the opportunity to apply greater effort and resources in developing the businesses in Nigeria; a key pillar in the development of our pan-African power platform strategy.
I am confident that the various strategic actions that have been taken in 2016 position CEC Africa well to launch its aspirations into the future. I would like to take this opportunity to welcome all our new shareholders and believe that, together we can take this Company forward to achieve great success.
Finally, I would like to take this opportunity to express sincere gratitude to Copperbelt Energy Corporation Plc (hitherto sole shareholder) for the continued support; to the board of directors for unfailing guidance; and management and staff for their commitment to the raison d’être of CEC Africa Investments Limited.
Siyanga Malumo
Chairman
