Zambia to Invest $275 Million in Energy After Debt Deal

Secretary to the Treasury at Zambia's Ministry of Finance and National Planning, Felix Nkulukusa, said the programme represents a long-term commitment to strengthening the country's electricity system over the next 15 years.

Zambia will invest US$275 million in its energy sector using savings generated through a landmark US$1.36 billion sovereign Eurobond buyback, a move backed by the African Development Bank Group that combines debt management with long-term infrastructure investment.

The government financed the debt buyback using a US$600 million loan from the African Development Bank Group, together with its own resources. Instead of directing all future savings toward debt servicing, Zambia has committed part of the financial gains to expanding reliable and affordable electricity access across the country. The initiative introduces a new financing model that links debt restructuring with development investment and could serve as an example for other African countries seeking to improve public finances while funding essential infrastructure.

Energy investment expected to boost growth and improve services

Secretary to the Treasury at Zambia's Ministry of Finance and National Planning, Felix Nkulukusa, said the programme represents a long-term commitment to strengthening the country's electricity system over the next 15 years. He said unreliable power supply, electricity losses within the distribution network and limited access in underserved communities have slowed economic growth, discouraged investment and reduced the quality of life for many Zambians.

The planned investments will improve the resilience of the national electricity network, helping households, businesses, and public institutions benefit from a more dependable and efficient power supply. Stronger energy infrastructure is also expected to support key sectors including mining, agriculture, manufacturing and tourism.

Innovative financing model links debt relief with development

Nana Spio-Garbrah, Manager for Structured Finance and Client Solutions at the African Development Bank Group, said the transaction demonstrates how innovative financial solutions can help countries address debt challenges while creating room for investments that support long-term development. She said the operation was designed to reduce Zambia's debt service burden, strengthen its financing profile and redirect savings into projects that improve energy security and economic resilience.

African Development Bank Group Country Manager for Zambia, Raubil Olaniyi Durowoju, described the initiative as an example of development finance addressing multiple national priorities at the same time. He said combining debt management with strategic investment in electricity infrastructure creates a stronger foundation for sustainable economic growth.

The operation supports the African Development Bank Group's priorities of expanding access to capital and building climate-resilient infrastructure. It also complements wider efforts to increase access to affordable, reliable and sustainable energy across Africa while supporting Zambia's ongoing economic reforms and efforts to strengthen macroeconomic stability.