Africa-Press – Zambia. The government of Zambia has announced that it has received near-unanimous support from bondholders for an innovative deal to repurchase $1.36 billion in debt, which requires the government to upgrade the electricity grid.
The country is using a $600 million loan from a regional development bank, along with some of its own resources, to repurchase maturing sovereign bonds, which are set to see rising interest rates, as part of its ongoing efforts to improve its financial situation.
In return, the government will spend up to $275 million over 15 years to enhance and modernize the electricity grid, in what it described as the world’s first “debt swap for development” focused on the energy sector of a nation.
Last week, the government offered bondholders an additional $65 million to approve the deal. In a statement, Zambia noted that holders of 97.85% of the total value of outstanding bonds had properly submitted their bonds.
Zambia, which defaulted on its debt following the COVID-19 pandemic, has been working on the new debt swap agreement for over two years. According to the latest data from the statistics agency, nearly half of the country’s population of 22 million still lacks access to electricity.
