Origination Memo: Zambia Sugar Mezzanine Facility 2026

Date: 2026-01-15 Author: Ceasar Siwale, Managing Director Status: Approved

Issuer

Zambia Sugar plc is the dominant sugar producer in Zambia, processing approximately 450,000 metric tonnes of sugarcane annually. Listed on the LuSE, the company is 75% owned by Illovo Sugar Africa (ABF Group). Revenue is primarily ZMW-denominated with some USD export exposure.

Transaction Thesis

Zambia Sugar seeks a ZMW 4 billion (approx. USD 160 million) mezzanine facility to finance a mill expansion that will increase throughput by 30% and enable entry into sugar-derived bioethanol production. The mezzanine structure is preferred over senior debt due to existing ABF guarantee constraints at the parent level.

Why Pangaea

Pangaea sourced this mandate proactively through our agribusiness sector coverage. Phatisa's existing presence in the Zambian agri-value chain positions us to co-arrange with them as the PE tranche anchor. AfDB's food security mandate makes this a natural fit for DFI engagement.

Recommended Next Step

Advance to investability assessment. Structuring memo to follow within 10 days. Phatisa NDA executed.

Risk Flags

• Existing senior lenders (Stanbic, FNB) will require consent for mezzanine ranking. Consent process may take 6-8 weeks.
• ZMW depreciation risk affects bioethanol revenue projections; hedging strategy to be addressed in structuring memo.