LUSAKA, June 26, 2026 — Zambia is to invest millions of dollars of savings realised through the successful US$ 1.36 billion debt buyback in projects to provide reliable and affordable electricity access as part of an innovative transaction backed by the African Development Bank Group [AfDB].
In a pioneering approach to development finance, the government of Zambia used a US$ 600 million loan from the AfDB Group coupled with its own resources to buy back the US$ 1.36 billion sovereign Eurobond.
As part of savings which could have gone into future debt servicing, the Zambian government has committed to earmark US$ 275 million, to be invested in the country’s energy sector, an approach that could be emulated by other African countries to unlock development financing.
Felix Nkulukusa, Secretary to the Treasury at Zambia’s Ministry of Finance and National Planning, said, “As a first-of-its-kind initiative, it has the potential to demonstrate how targeted investment in energy infrastructure can support sustainable development and economic growth. These investments will strengthen the resilience of our electricity system and help ensure that households, businesses, and public services can depend on a more stable and efficient power supply.”
Nkulukusa outlined the government’s 15-year vision for the programme, framing it as a direct response to constraints that have long held Zambia back.
“Unreliable supply, losses in the distribution network, and limited access in underserved areas are not merely technical problems; they undermine growth, they deter investment, and, most critically, they diminish the quality of life of Zambian citizens,” he added, “This programme is our commitment to changing that.”
Nana Spio-Garbrah, Manager, Structured Finance and Client Solutions of the AfDB’s Syndications and Client Solutions Department, said: “This transaction reflects the African Development Bank’s commitment to supporting African countries with innovative and practical financial solutions tailored to their debt and development challenges.”
She added: “In Zambia’s case, we worked closely with the authorities and partners to structure an operation that helps ease debt service pressures, improve the country’s financing profile, and redirect savings toward critical investments in the energy sector. By linking debt management with targeted investments in energy security, this operation demonstrates how financial innovation can support both economic resilience and long-term development outcomes.”
The Bank Group’s Country Manager for Zambia, Raubil Olaniyi Durowoju, said: “This innovative transaction demonstrates how development finance can be deployed to address multiple challenges simultaneously. By linking debt management with strategic investments in energy infrastructure, Zambia is creating a pathway toward greater economic resilience, energy security, and sustainable growth.”
The operation aligns with the Four Cardinal Points of the AfDB Group, particularly the priorities of enhancing access to capital and building climate resilient infrastructure. It also complements broader efforts to expand access to affordable, dependable, and sustainable energy throughout the continent.
Zambia has made significant progress in implementing economic reforms and restoring macroeconomic stability. The transaction supports the country’s commitment to strengthening public finances while investing in a stronger and more resilient electricity network that is critical to supporting growth in mining, agriculture, manufacturing, tourism and other sectors of the economy.
The AfDB Group remains committed to working with Zambia and its development partners to advance innovative financing solutions that promote sustainable development and improve the lives of citizens.
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