In a pioneering approach to development finance, the government of Zambia has repurchased its $1.36 billion sovereign Eurobond by combining its own resources with a $600 million loan from the African Development Bank Group.
The African Development Bank (AfDB) received critical support for this transaction from the credit insurance market, represented by Atrium Underwriters, Canopius Managing Agents, Chaucer Group, MS Amlin, Mosaic Insurance, MSIG USA, Liberty Specialty Markets, Brit Insurance, The Hartford, Mitsui Sumitomo Insurance Company (Europe) Limited, and The Texel Group.
This landmark debt-for-energy transaction enables the Zambian government to redirect $275 million in debt-servicing savings toward investments in the country’s energy sector, showcasing an innovative strategy that other African countries could emulate to unlock development financing.
Zambia’s bond buyback demonstrates the impact of public-private partnerships in development finance. By leveraging private credit insurance, the AfDB mobilised risk-bearing capital for a package that enhances Zambia’s debt sustainability and unlocks investment in critical energy infrastructure.
This transaction highlights private insurance as a powerful development catalyst , enabling the AfDB to advance its mobilisation mandate by crowding in private sector participation, amplifying its balance sheet, and delivering greater development impact across regional member countries.
Vice President for Finance and Chief Financial Officer of the African Development Bank Group Hassatou Diop N’Sele said: “The African Development Bank remains committed to supporting Zambia’s energy sector as a key driver of economic transformation. Our current and past investments are focused on strengthening energy security, expanding transmission infrastructure, and promoting renewable energy solutions to enhance resilience and unlock sustainable growth.”
Daniel Riordan, SVP, Head of Political Risk, Credit, & Surety, MSIG USA, commented: “In line with our mission to contribute to the development of a more vibrant society and help secure a sound future for the earth, MSIG USA is proud to have supported this important transaction, which will contribute to Zambia’s sustainable development while demonstrating the vital role private insurers play in mobilizing development finance around the world.”
For the insurance market, the transaction highlights the growing role that private risk capital can play in addressing development finance challenges.
By partnering with the AfDB and providing tailored credit insurance capacity, insurers helped unlock financing that might otherwise have been constrained, demonstrating how private sector expertise and balance sheets can be mobilised in support of sustainable development objectives.
Shahin Samiy, Director at Texel, stated: “We are proud to have supported the African Development Bank in executing this important transaction, which highlights the Bank’s leadership in advancing innovative and impactful financial solutions across the continent. This successful bond buyback underscores Zambia’s commitment to prudent and forward-looking debt liability management, while demonstrating the African Development Bank’s pivotal role in fostering market confidence and sustainable outcomes for its member countries.
“We also recognise the constructive engagement and cooperation of the insurance market in meeting the complexities of the transaction. As broker to the African Development Bank, we are honoured to have contributed to an initiative that ultimately supports Zambia’s long-term economic resilience and development.”
