Zambia launches $600m debt-for-energy swap to buy back 2053 bonds

Zambia has launched the debt-for-energy conversion, initiating a tender offer to repurchase its U.S.$1,364,725,564 Fixed Rate Step-Up Amortizing Notes due 2053, authorities have said. The move follows Zambia’s successful debt restructuring in 2024 and was backed by a U.S.$600 million loan from the African Development Bank on favorable terms, complemented by the Republic’s own resources. According to a statement issued in Lusaka by the Ministry of Finance and National Planning, central to the initiative was a transformative 15-year national Grid Resilience Program, which would invest in the national electricity distribution network to address access to reliable and affordable electricity.

The program would be coordinated by GreenCo Power Services, and implemented by a newly set up entity with a board led by private sector representatives together with the Government. “This milestone reflects the Republic’s proactive and forward-looking approach to public debt management—one designed to meaningfully reduce its debt burden and accelerate the country’s sustainable return to the international capital markets,” reads the statement . To maximize participation, Zambia has extended an attractive premium over market price to investors who choose to participate in the tender offer.

If participation in the buyback reaches 75percent, the country would be able to activate the clean-up provision embedded in the original terms of the Notes, allowing it to redeem the debt entirely as part of a market-friendly operation. “This landmark transaction is intended to mark the successful conclusion of Zambia’s sovereign debt restructuring, and herald an exciting new chapter in its proactive debt management strategy,” the statement read. Approved by the AfDB Board of Directors, the transaction is poised to serve as a powerful blueprint for future similar initiatives across the African continent.

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The Ministry stated that for Zambians, the benefits were both immediate and far-reaching. “By easing future repayment obligations, the Republic will unlock fiscal space for investments in essential services, economic development, and opportunities for citizens,” it said. In parallel, the Grid Resilience Program would help strengthen the reliability of the national electricity supply, energizing economic activity and improving everyday life for households and businesses across the country. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.

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