Zambia has demonstrated how a country can use an innovative financial structure not simply to manage its balance sheet, but to translate that into real and lasting infrastructure investment for its citizens.
Partner
Client opportunity
The Republic of Zambia sought to buy back the outstanding bonds it had issued as part of its 2024 debt restructuring and to reinvest the resulting savings into critical energy infrastructure. To that end, we advised Zambia on a landmark debt-for-energy conversion involving the repurchase of about US$1.3 billion of outstanding bonds, funded, in part, by a US$600 million loan from the African Development Bank.
Our approach
We brought together a team with deep experience across capital markets, project finance and sovereign debt to guide Zambia through the complexities of this groundbreaking transaction. Drawing on our in-depth knowledge of the energy sector, a team of ten lawyers devised an innovative financial structure to buy back the outstanding bonds and redirect the savings to power Zambia's national grid.
Outcome
The tender offer garnered near-unanimous participation, enabling Zambia to eliminate future payment obligations on approximately US$1.3 billion of outstanding sovereign bonds.
Zambia will channel the US$275 million in debt service savings unlocked over the next 15 years into the new Grid Resilience Program. The program aims to modernize and expand the country's electricity distribution network, reducing technical losses, eliminating network bottlenecks, improving system reliability, and expanding access to underserved communities and businesses.
