Zambia has secured enough support from investors to proceed with the buyback of its $1.36 billion bond due in 2053, marking a major milestone in the country’s effort to reduce borrowing costs, strengthen public finances and expand access to electricity.
The transaction gives Lusaka the green light to launch what it describes as a pioneering debt-for-development programme that will redirect hundreds of millions of dollars from debt servicing into energy infrastructure at a time when Africa’s second-largest copper producer is attempting to sustain an economic recovery after years of financial distress.
The operation comes nearly six years after Zambia became Africa’s first sovereign default of the Covid-19 era, an event that triggered one of the continent’s most complex debt restructuring processes and highlighted the vulnerability of many African economies to rising borrowing costs.
The government’s tender offer attracted enough participation to cross the threshold required to retire the bond in full, overcoming opposition from a group of investors that had initially rejected the terms.
The buyback is being financed through a $600 million facility backed by the African Development Bank, allowing Zambia to replace relatively expensive market debt with cheaper multilateral financing.
