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Credit insurance backs Zambia’s buyback of $1.36B sovereign bond
Zambia plans to use $275 million of debt service savings to fund energy sector investments after repurchasing the Eurobond with AfDB financing.
Zambia has repurchased its $1.36 billion sovereign Eurobond in a debt-for-energy transaction supported by the African Development Bank Group, using a combination of government resources and a $600 million AfDB loan, according to Reinsurance News.
The AfDB says it received critical support from the credit insurance market for the buyback, with participating insurers and managing agents including 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.
The transaction is designed to redirect $275 million in debt servicing savings toward investments in Zambia’s energy sector, aiming to strengthen debt sustainability and unlock financing for energy infrastructure.
Reinsurance News also notes that the deal underscores the role of private risk capital in development finance by crowding in private participation and expanding the AfDB’s ability to mobilize risk-bearing capital, with AfDB CFO Hassatou Diop N’Sele saying the bank remains focused on supporting Zambia’s energy sector and energy security.